Handelsbanken, Timken, Agilent, Swedish Export, National Rural sell bonds; spreads steady

By Andrea Heisinger and Paul Deckelman

New York, Sept. 9 - Svenska Handelsbanken AB, Timken Co., Agilent Technologies, Inc., Swedish Export Credit Corp., National Rural Utilities Cooperative Finance Corp. and W.R. Berkley Corp. all sold straight investment-grade deals on a busy Wednesday in the primary market.

Also pricing was a split-rated sale from Midcontinent Express Pipeline LLC. The natural gas pipeline sold two tranches, of five-and 10-year notes totaling $500 million.

The Agilent sale was upsized by $250 million to add a tranche of three-year notes due to investor demand. The final two-tranche deal that also included six-year notes totaled $750 million.

The two deals from Swedish issuers were some of the largest of the day. Handelsbanken's offering of $2.5 billion of three-year fixed- and floating-rate notes went overnight from Tuesday, likely due to a ratings downgrade by Moody's. Swedish Export Credit sold $1.5 billion of five-year notes in a rare offering of straight bonds.

Timken offered $250 million of five-year notes, which priced quickly. National Rural Utilities split its $500 million sale of three- and six-year collateral trust bonds evenly between the two tranches. The W.R. Berkley $300 million deal of 10-year notes priced quietly with one bookrunner.

The remainder of the week is expected to be quieter, with a smattering of deals, but not all selling in one day.

"I hope it quiets down," a syndicate source said.

Among the established issues in the secondary arena on Wednesday, a market source said the CDX Series 12 North American high-grade index tightened by 3 basis points to a mid bid-asked spread level of 113 bps.

Advancing issues - which trailed decliners on Tuesday for a second straight session, lagging by a nearly four-to-three margin, managed to pull virtually dead even with them on Wednesday.

Overall market activity, reflected in dollar-volume totals, was up around 29% from Tuesday's pace.

Spreads in general were seen little changed, in line with steady Treasury yields; for instance, the yield on the benchmark 10-year note eased by 1 bp Wednesday to 3.47%.

Overall secondary market was muted, with the busy new-deal calendar grabbing the spotlight.

Agilent prices upsized deal

Agilent Technologies sold an upsized $750 million of senior notes in two tranches.

A tranche of three-year notes was added to the original $500 million deal due to demand, the source said.

The $250 million of 4.45% three-year notes priced at Treasuries plus 300 bps. They did not have official price talk because of the lateness of the tranche's addition, the source said, but came in line with the 300 bps spread that was mentioned.

The $500 million of 5.5% six-year notes priced at a spread of 320 bps over Treasuries. They were whispered at guidance of the mid-300 bps, and priced considerably tight of that, the source said.

Bookrunners were Barclays Capital, Citigroup Global Markets and Credit Suisse Securities.

Proceeds will be used for general corporate purposes, possibly including the acquisition of Varian, Inc. for $1.5 billion in cash.

The diversified measurement company is based in Santa Clara, Calif.

Handelsbanken offers $2.5 billion

Svenska Handelsbanken priced $2.5 billion notes in two tranches early in the day after the deal went overnight, an informed source said.

Unlike similar recent sales, the deal did not go overnight to let Asian and European investors in on the sale, the source said.

Instead, it was likely due to a downgrade of the bank, and four other Swedish financial names, by Moody's. The long-term senior debt and deposit ratings of the four institutions were cut by a notch, according to a press release out of London on Tuesday.

The $1.5 billion of 2.875% three-year notes from the deal priced at Treasuries plus 145 bps.

A $1 billion tranche of three-year floating-rate notes priced at par to yield three-month Libor plus 100 bps.

They were sold via Rule 144A.

Citigroup Global Markets, Goldman Sachs & Co. and Morgan Stanley ran the books.

The financial and banking services company is based in Stockholm, Sweden.

Midcontinent Express sells two tranches

Kinder Morgan subsidiary Midcontinent Express Pipeline offered $800 million split-rated notes (Ba1/BBB/BBB) in two tranches, an informed source said.

The deal was run off the high-grade desk, he said, although couldn't disclose how much interest came from high-yield or high-grade investors.

The $350 million of 5.45% five-year notes priced at a spread of Treasuries plus 312.5 bps.

A $450 million tranche of 6.7% 10-year notes priced at Treasuries plus 325 bps.

The tranches were sold via Rule 144A.

Bookrunners were Deutsche Bank Securities, Morgan Stanley and RBS Securities.

The natural gas pipeline is based in Houston.

National Rural Utilities sells collateral bonds

National Rural Utilities Cooperative Finance priced $500 million of collateral trust bonds in two tranches.

The deal "went really well," on a busy day, a source close to the sale said.

A $250 million tranche of 2.625% three-year notes priced at Treasuries plus 125 bps.

The $250 million of 3.875% six-year notes priced at Treasuries plus 158 bps.

Deutsche Bank Securities, RBS Securities and UBS Investment Bank were bookrunners.

Proceeds will be used for general corporate purposes, including repayment of short-term debt, primarily consisting of commercial paper.

The private-market lender to the nation's electric cooperatives is based in Herndon, Va.

New deals to slow

A calendar remains for the rest of the week, but there will not be any days as hectic as Wednesday, sources said.

A source who worked on three deals that priced Wednesday said that the "market was good. We were very busy today. I think we'll continue to be busy."

He counted nearly 10 deals from a variety of names.

Despite a primary flush with new offerings, it will likely slow down in the remaining two days of the holiday-shortened week.

"I think we had all these companies waiting for the long weekend to be done so they could [price deals]," a market source said. "We'll continue to be in the market the rest of the week."

Another source said his desk had things that could potentially price, but wouldn't hazard a guess as to when they might come to the market.

"I can't even tell you right now," he said.

Timken sells five-years

Diversified industrial company Timken priced $250 million 6% five-year senior notes early at Treasuries plus 362.5 bps.

The bookrunner was J.P. Morgan Securities, with Deutsche Bank Securities, Morgan Stanley and Bank of America Merrill Lynch as passive books.

Proceeds will be used to repay 5.75% senior notes due in February 2010.

The bearings, alloy steel and aerospace products maker is based in Canton, Ohio.

Swedish Export offers $1.5 billion

Swedish Export Credit priced $1.5 billion of 3.25% five-year notes at Treasuries plus 86.75 bps, according to an FWP filing with the Securities and Exchange Commission.

Bookrunners were Bank of America Merrill Lynch and J.P. Morgan Securities.

The financial services provider is based in Stockholm, Sweden.

W.R. Berkley sells 10-year notes quietly

W.R. Berkley sold $300 million of 7.375% 10-year senior notes late in the day at Treasuries plus 390 bps, an informed source said.

The bookrunner was Credit Suisse Securities.

Proceeds are being used for general corporate purposes, including the potential repurchase of common stock and to repay debt including $150 million of 5.125% senior notes maturing Sept. 30, 2010.

The insurance holding company is based in Greenwich, Conn.

Secondary overshadowed

With a slew of new deals pricing, secondary activity took pretty much a back seat on Wednesday.

A trader said that he was seeing fairly quiet activity levels.

"We still had a decent bid to the market," he noted. "I wouldn't say things are moving up as much as they had [on Tuesday] or the day before, but there's definitely a decent bid to the market and there's still a strong tone."

Credit Suisse tightens a little

The trader said that he had done some trade in Credit Suisse's 10-year paper, which was easily the busiest bond in the high-grade sector - the European banking giant's 5.30% notes due 2019 had racked up some $65 million traded as of mid-afternoon, a market source at another desk said. The source quoted those bonds at a spread of 167 bps over comparable Treasuries.

The trader meantime said that the bonds were 'wrapped around a 170 kind of context," which he said was "a little tighter than it was last week - but it's not moving dramatically at all," despite the considerable volume.

GE Capital bonds busy

While the Credit Suisse bonds were the most heavily traded issue, the source also said that there was brisk activity in General Electric Capital Corp.'s bonds, with the Fairfield, Conn.-based commercial lender's 3½% notes due 2012 and its 6% notes due 2019 having each traded nearly $40 million by mid-afternoon, only trailing Credit Suisse.

The first issue was quoted at 122 bps bid, and the second at 227 bps.

At another desk, GE Capital's 6% notes due 2012 were seen having widened out by as much as 25 bps to the 180 bps over mark.

Existing Vale, CVS bonds trade around

Away from the financial, Vale Overseas Ltd.'s 6.25% notes due 2017 were seen having firmed about 30 bps on the session, to about the 160 bps over mark - investors apparently unfazed by the big Brazilian metals producer's $1 billion offering of 10-year notes, which priced on Tuesday at 225 bps over Treasuries.

However, CVS Caremark Corp.'s 6 1/8% notes due 2016 were quoted having widened out by around 20 bps to the 130 bps over level, a day after the Rhode Island-based drugstore giant successfully priced a $1.5 billion offering of 30-year bonds at 187.5 bps over.

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