Duke Realty, JPMorgan Chase Capital price deals; Duke Realty gains in trading

By Andrea Heisinger and Cristal Cody

New York, March 25 - Duke Realty LP and JPMorgan Chase Capital XXIX sold securities on a Thursday that saw issuance die down.

JPMorgan Chase offered its $1.5 billion of 30-year capital securities at the tight end of price guidance.

Real estate investment trust Duke Realty priced $250 million of 10-year notes in a deal that got done quickly. It was priced by early afternoon after being announced in the morning.

Bonds sales quieted mostly due to a lack of supply from issuers, sources said, and not anything to do with market tone.

There are no new deals set for Friday, although someone "could sneak something in," a market source said.

Secondary traders took notice of Duke Realty's new $250 million offering of notes, which tightened as much as 10 bps in the secondary, according to sources.

But little was seen in trading for JPMorgan Chase Capital XXIX's new capital securities on Thursday, one trader told Prospect News.

Elsewhere, Treasuries continued to ease on Thursday after weakening more than 10 bps a day earlier.

On Thursday, the yield on the benchmark 10-year Treasury note eased 3 bps to 3.88% after moving out 17 bps on Wednesday. Also, the yield on the 30-year bond ended 3 bps weaker at 4.76% after easing 13 bps the day before.

Elsewhere in the market, overall Trace volume slipped less than 1% to about $14.38 billion, according to a source.

Still, "volume looks pretty good today," by holding at more than $10 billion, one source said.

Meanwhile, the CDX Series 14 North American high-grade index ended Thursday unchanged at a mid bid-asked spread level of 88 bps, according to a source.

JPMorgan prices capital securities

JPMorgan Chase Capital XXIX priced $1.5 billion, or 60 million, of 6.7% 30-year capital securities after the sale went overnight, a market source said.

They priced at the tight end of guidance in the 6.75% area.

The deal was announced late Wednesday. It was increased from a base amount of $500 million.

The securities (A2/BBB+/A) were sold at a liquidation amount of $25 each.

The deal is guaranteed by JPMorgan Chase & Co. Proceeds are being used for general corporate purposes.

J.P. Morgan Securities was the bookrunner.

The financial services company is based in New York City.

Duke Realty sells small deal

Indianapolis-based Duke Realty priced $250 million of 6.75% 10-year senior unsecured notes (Baa2/BBB-/BBB) early in the day to yield 287.5 bps over Treasuries, a source who worked on the sale said.

It came in at the tight end of guidance in the 300 bps area, the source said. There was about $2 billion in demand on the books.

The size was not altered from what was originally announced.

Bookrunners were J.P. Morgan Securities, Morgan Stanley & Co. and Wells Fargo Securities.

The real estate investment trust will use proceeds to reduce debt and for other general corporate purposes.

New issues ease

Supply waned in the high-grade market after two busy days of issuance, a source said.

Many companies had been pricing bonds ahead of the coming holidays, and despite Thursday's lull more are expected next week.

One of the larger sales of the week came from Wal-Mart Stores Inc. which priced $2 billion in two tranches on Wednesday.

That sale "went very well," a source who worked on it said. There was about $5.5 billion in demand, putting it more than two times oversubscribed.

"That's kind of normal now," the source said. Both the five-year and 30-year tranches priced in from guidance.

"Everything grinded tighter," he said.

A $3.25 billion sale from Anheuser-Busch InBev Worldwide Inc. that was also priced on Wednesday likewise saw healthy investor demand, a source said.

Duke Realty tighter

Duke Realty's new $250 million offering of notes tightened as much as 10 bps in the secondary, according to sources.

The 6.75% notes due 2020 priced earlier on Thursday at Treasuries plus 287.5 bps. The notes were seen trading late in the day at 280 bps bid, 270 bps offered, one trader said.

As the market closed, the notes were seen continuing to firm to 277 bps bid, 272 bps offered but on little volume, according to a source.

"Saw no flow on the Dukes," the source said.

JPMorgan Chase securities unnoticed

Meanwhile, traders paid scant attention to JPMorgan Chase Capital XXIX's new capital securities on Thursday.

The 6.7% notes due 2040 priced at par of $25.

"Didn't seen anything on it," one trader said.

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