Wyndham brings $800 million; shortened week produces $26 billion of new debt; CBS, BP flat

By Sheri Kasprzak and Cristal Cody

New York, Feb. 27 - Investment-grade primary issuance was led on Monday by a $500 million offering from Citigroup Inc.

Last week's issuance totaled $26 billion despite the fact that it was a holiday-shortened week.

Once the market got back down to business following the Presidents Day holiday, $26 billion of new issues came to market, outpacing the week before by about $3 billion, said Jody Lurie, corporate bond analyst with Janney Montgomery Scott LLC.

"Even so, only 23% of the new debt came from high-yield issuers, versus the prior week, when 27% came from high-yield issuers," Lurie noted.

The Markit CDX Series 17 North American high-grade index firmed 1 basis point to a spread of 95 bps.

Trading was "relatively light today," a trader said.

Wyndham Worldwide Inc.'s new notes traded about 10 bps better, a trader said.

CBS Corp.'s $700 million of senior notes sold on Friday traded mostly unchanged in Monday's session.

BP Capital Markets plc's notes traded unchanged on the delay of the parent company's trial over the April 2010 Gulf of Mexico oil spill, a trader said.

Teck Resources Ltd.'s long bonds are trading 5 bps wider from where they priced earlier in the month.

Investment-grade bank and brokerage credit default swaps costs were unchanged to lower, a source said.

Citigroup's CDS costs traded 4 bps lower at 231 bps bid, 236 bps offered. J.P. Morgan's CDS costs were unchanged at 113 bps bid, 118 bps offered.

Brokerage paper CDS costs also were flat. Merrill Lynch's CDS costs traded unchanged at 295 bps bid, 310 bps offered. Goldman Sachs' CDS costs were flat at 265 bps bid, 270 bps offered. Morgan Stanley's CDS costs traded unchanged at 330 bps bid, 340 bps offered.

Treasuries were stronger over the day. The benchmark 10-year note yield fell to 1.92% from 1.97%. The yield on the 30-year bond yield dropped 6 bps to 3.04%.

Wyndham brings upsized deal

Heading up Monday's primary activity, Wyndham Worldwide priced $800 million of senior notes (Baa3/BBB-/), said a pricing sheet. The deal was upsized from $600 million.

The offering included $300 million of five-year notes and $500 million of 10-year notes.

The five-year notes are due March 1, 2017 and bear interest at 2.95% priced at a spread of Treasuries plus 215 basis points. The notes were priced at 99.789 to yield 2.996%. The notes feature a make-whole call at 35 bps.

The 10-year notes are due March 1, 2022 and bear interest at 4.25% priced at a spread of Treasuries plus 235 bps. The notes were priced at 99.807 to yield 4.274%. The notes feature a make-whole call at Treasuries plus 35 bps.

J.P. Morgan Securities LLC was the bookrunner for the notes.

The proceeds will be used to repurchase any and all of the $250 million of principal outstanding on the company's 9.875% notes due in 2014 and a portion of the $800 million of principal outstanding 6% senior notes due in 2016 and the $250 million of principal outstanding on its 7.375% notes due in 2020. The remainder will be used to repay borrowings under a revolving credit facility and fund general corporate purposes.

In the secondary market, the notes due 2017 traded tighter at 205 bps bid, 202 bps offered, a trader said.

The notes due 2022 firmed to 222 bps bid, 217 bps offered.

Wyndham, based in Parsippany, N.J., is a hospitality company.

Citigroup sells $500 million

Elsewhere during the day, Citigroup brought $500 million of floating-rate senior notes Monday, according to a free writing prospectus filed with the Securities and Exchange Commission.

The notes (A3/A-/A) were sold through joint book manager Citigroup Global Markets Inc.

The notes are due March 6, 2017 and bear interest at three-month Libor plus 220 basis points.

The proceeds will be used for general corporate purposes.

The financial services company is headquartered in New York.

Westar prices $250 million

Also during the session, Westar Energy Inc. priced $250 million of first mortgage bonds Monday, according to a free writing prospectus filed with the Securities and Exchange Commission.

The bonds (A3/BBB+/A-) are due March 1, 2042 and bear interest at 4.125% priced at a spread of Treasuries plus 110 basis points. The bonds were priced at 99.914 to yield 4.13%.

The bonds feature an optional redemption before Sept. 1, 2041 at a discount rate of Treasuries plus 20 bps or after Sept. 1, 2041 at par.

The joint bookrunners for the deal were Barclays Capital Inc., Mitsubishi UFJ Securities (USA) Inc. and Wells Fargo Securities LLC.

The proceeds will be used to finance the company's ongoing capital program.

CBS flat

In the secondary market on Monday, CBS's 3.375% notes due March 1, 2022 (Baa2/BBB/BBB) traded at 150 bps bid, 147 bps offered, according to a trader.

The notes were sold on Friday at a spread of Treasuries plus 150 basis points.

The broadcasting company is headquartered in New York.

Teck mixed

Teck Resources' two tranches sold in a $1 billion offering of senior notes (Baa2/BBB) on Feb. 16 were mixed in trading.

The company's 3% notes due 2019 are trading tighter at 160 bps bid, 155 bps offered, but flat over the day, a trader said on Monday. The company sold the tranche in a $500 million offering at 165 bps over Treasuries.

Teck's 30-year bonds widened to 215 bps bid, 205 bps offered. The bonds priced at a spread of 210 bps over Treasuries.

The diversified mining company is based in Vancouver, B.C.

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