GE Capital, Ford, MetLife, Citi price as window opens; new issues mixed in trading

By Aleesia Forni and Andrea Heisinger

New York, Jan. 3 - The floodgates of new issues opened in the high-grade bond market on Thursday, as multi-billion-dollar offerings were offered by General Electric Capital Corp., Ford Motor Co., MetLife Global Funding I and Citigroup Inc.

GE Capital sold $4 billion of notes in three parts including floating-rate three-year notes, and fixed-rate notes due 2016 and 2023. A source said there was upwards of $9.5 billion in investor demand on the books for the trade.

There was a $2 billion crossover sale of 30-year bonds from Ford which priced tighter than initial talk.

Citigroup sold $1.75 billion of three-year notes tighter than guidance.

American Tower Corp. sold $1 billion of split-rated 10-year notes.

There was a $750 million offering of senior notes in two maturities from Virginia Electric Power Co.

Allstate Corp. was in the preferred stock market with a sale of $25-par fixed-to-floating rate subordinated debentures due in 2053.

There was $11.5 billion of volume in the high-grade primary for the day, which topped the estimate of $5 billion to $10 billion in supply for the holiday-shortened short week.

Some economic data is scheduled for release on Friday, including payroll numbers, so issuers were keen to price bonds during the window of opportunity on Thursday.

"It felt like a Tuesday out there," said one source. "We got it all in in one shot."

There is little supply expected for Friday, although the coming week is looking to be busy as companies that were unable to price in December hit the market for financing needs.

"I think we should see about $20 billion in the pipeline," one source said.

Citigroup's new notes were quoted 1 bp better near the end of the session, while Ford's notes were trading 7 bps wider.

A trader saw GE Capital's 10-year issue trade flat late Thursday.

Meanwhile, the company's existing 5.625% notes due 2018 closed the session 2 bps tighter.

Investment-grade bank and brokerage credit default swaps costs rose on Thursday.

Bank of America's CDS costs widened 1 bp to 117 bps bid, 122 bps offered. Citi's CDS costs were 1 bp wider at 116 bps bid, 121 bps offered. J.P. Morgan's CDS costs declined 1 bp to 80 bps bid, 84 bps offered. Wells Fargo's CDS costs widened 1 bp to 70 bps bid, 74 bps offered.

Merrill Lynch's CDS costs were 2 bps wider at 119 bps bid, 124 bps offered. Morgan Stanley's CDS costs rose 2 bps to 167 bps bid, 172 bps offered. Goldman Sachs' CDS costs rose 1 bps to 136 bps bid, 141 bps offered.

GE Capital prices tight

General Electric Capital sold $4 billion of notes (A1/AA+/) in three tranches, a source told Prospect News.

A $600 million tranche of three-year floating-rate notes was sold at par to yield Libor plus 60 bps. Pricing was at the low end of initial talk in the Libor plus 62.5 bps area.

There was $1.4 billion of 1% three-year notes priced at a spread of Treasuries plus 72 bps. The tranche sold at the tight end of guidance in the 75 bps area.

Finally, a $2 billion tranche of 3.1% 10-year notes was sold at 122 bps over Treasuries. Pricing was also at the tight end of talk in the 125 bps area.

The 10-year notes were trading at 122 bps bid, 118 bps offered near the end of the session, while the three-year notes were quoted at 68 bps offered.

There was about $1 billion in investor demand for the tranche of three-year floaters, $3.4 billion for the three-year notes and $5 billion on the 10-year tranche.

Bank of America Merrill Lynch, Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC were bookrunners.

The funding arm of General Electric Co. is based in Norwalk, Conn.

Citigroup sells short maturity

Citigroup priced $1.75 billion of 1.25% three-year notes (Baa2/A-/A) at Treasuries plus 95 bps, a market source said.

Pricing was at the tight end of talk which was announced in the low Treasuries plus 100 bps area.

A trader quoted the notes at 94 bps bid, 91 bps offered in trading late Thursday.

Citigroup Global Markets Inc. was bookrunner.

The financial services company is based in New York City.

Ford Motor's crossover trade

Ford Motor was in the market with a $2 billion sale of 4.75% 30-year bonds (Baa3/BB+/BBB-) priced to yield Treasuries plus 180 bps, an informed source said.

Price guidance was in the low 200 bps over Treasuries area, a market source said at midday.

The notes were seen at 187 bps bid, 181 bps offered near the end of Thursday's trading.

Bookrunners were Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co. and Morgan Stanley & Co. LLC.

Proceeds will be used to redeem higher cost outstanding debt and to accelerate contributions to pension plans during 2013 to continue de-risking pension obligations.

The car maker is based in Dearborn, Mich.

MetLife sells $2 billion

MetLife Global Funding priced $2 billion of notes (Aa3/AA-/AA-) with maturities of 2018 and 2023, a source said.

The sale included $1.25 billion of 1.5% five-year notes sold at a spread of Treasuries plus 80 bps.

There was also $750 million of 3% 10-year notes priced at 110 bps over Treasuries.

Pricing was done under Rule 144A and Regulation S.

Bookrunners for the five-year notes were Barclays, J.P. Morgan Securities LLC and UBS Securities LLC. Those for the 10-year notes were Bank of America Merrill Lynch, JPMorgan and Morgan Stanley & Co. LLC.

The unit of insurance and employee benefits company MetLife, Inc. is based in New York City.

American Tower's 10-year

American Tower priced $1 billion of 3.5% 10-year senior notes (Baa3/BB+/BBB-) to yield Treasuries plus 170 basis points, a market source said.

The crossover notes were sold tighter than initial talk in the Treasuries plus 185 bps area, the source said.

Barclays, J.P. Morgan Securities LLC, RBC Capital Markets LLC and RBS Securities Inc. were active bookrunners.

Proceeds will be used to refinance some or all of existing debt incurred under a 2011 credit facility and/or a 2012 credit facility used to fund recent acquisitions.

The owner and operator of communications towers is based in Boston.

Virginia Electric beats talk

Virginia Electric Power priced $750 million of senior notes (A3/A-/A-) in two maturities, an informed source said.

The sale included $250 million of 1.2% five-year notes sold at a spread of Treasuries plus 45 bps. This level was tighter than initial talk in the Treasuries plus 60 bps area.

A $500 million tranche of 4% 30-year bonds was priced at Treasuries plus 93 bps. The level was lower than initial guidance in the low 100 bps area.

Bookrunners were Bank of America Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs & Co. and Scotia Capital (USA) Inc.

Proceeds are being used for general corporate purposes including repayment of short-term debt.

The public electric utility is based in Richmond, Va.

Allstate plans hybrids

Allstate intends to issue at least $500 million of $25-par fixed-to-floating rate subordinated debentures due Jan. 15, 2053, according to a prospectus filed with the Securities and Exchange Commission.

Price talk is around 5.25%, a trader said.

"There's no selling group, just the underwriters, so that could bring some other people in," a trader said, seeing the issue at $24.75 in the gray market as of midday.

After the close, a trader said the deal had not yet "officially" priced, though he quoted the new issue at $25.10 bid, $25.20 offered. As of 6 p.m. ET, the deal had yet to price.

The interest rate will be fixed through Jan. 15, 2023. After Jan. 15, 2023, the debentures' interest rate will convert to floating, which will be calculated at Libor plus a to-be-determined spread.

The company intends to list the new issue on the New York Stock Exchange under the ticker symbol "ALLPB."

Joint bookrunners are J.P. Morgan Securities LLC, Goldman Sachs & Co. and Bank of America Merrill Lynch.

The Northbrook, Ill.-based insurance company will use proceeds for general corporate purposes, including the repurchase of common stock through open market purchases or through an accelerated purchase program.

GE Capital

GE Capital's 5.625% notes due May 1, 2018 were 2 bps tighter on Thursday at a spread of 121 bps bid.

The $4 billion of notes was sold in May 2008.

Stephanie N. Rotondo contributed to this review

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