Caterpillar sells $500 million; National Semiconductor brings $250 million, gains in trading

By Cristal Cody and Sheri Kasprzak

New York, March 31 - Primary action remained fairly light on Wednesday, led by a $500 million sale of 2% medium-term notes from Caterpillar Financial Services Corp.

"It's slow comparatively," said one sellsider.

"There's some stuff out there, but I imagine it will be even quieter tomorrow [Thursday]."

Also in Wednesday's primary, National Semiconductor Corp. priced $250 million in split-rated 3.95% senior notes.

In secondary trading, National Semiconductor's new notes firmed, while a $1.75 billion add-on to existing notes from Bank of Nova Scotia showed little activity on the first day out in the secondary, sources told Prospect News.

Meanwhile, the CDX Series 14 North American high-grade index was "wider" a second day on Wednesday, one source said.

The index moved out 2 bps to a mid bid-asked spread level of 88 bps, according to a source.

"Things are quiet today ahead of the numbers on Friday," a trader said Wednesday. "Volume's decent."

Overall Trace volume increased 14% to more than $13 billion on Tuesday, according to one source.

Elsewhere, Treasuries continued to strengthen a second day on Wednesday.

The yield on the 5-year Treasury note tightened 5 bps to 2.55%. In addition, the yield on the 10-year Treasury note firmed 2 bps to 3.83%, and the yield on the 30-year Treasury bond ended the day at 4.71% from 4.74%.

Caterpillar brings $500 million

Caterpillar Financial sold $500 million of series F notes (A2/A/A) that are due April 5, 2013 and priced at 99.829 to yield 2.059%. The spread came at 48 bps over Treasuries.

The bookrunners were Citigroup Global Markets Inc. and Barclays Capital Inc.

Proceeds will be used for general corporate purposes.

Based in Nashville, Caterpillar Financial Services is the financial services arm of Caterpillar Inc., a construction and mining equipment producer.

National Semiconductor sells $250 million

National Semiconductor priced Wednesday $250 million in 3.95% senior unsecured notes at 165 bps over Tresasuries.

The notes (Baa1/BB+/BBB), which are due April 15, 2015, were priced at 98.877 to yield 4.2%.

Goldman, Sachs & Co. was the bookrunner.

Proceeds will fund the repayment of debt and general corporate purposes.

National Semiconductor, headquartered in Santa Clara, Calif., develops analog chips for wireless handsets, displays, information appliances and information infrastructure.

National Semiconductor firms

In secondary trading, National Semiconductor's new notes gained traction on the bid side, according to sources.

The semiconductor manufacturer priced $250 million of 3.95% notes due 2015 at Treasuries plus 165 bps.

"National Semiconductor's are 159 bps bid without an offering," one trader said.

Late in the day, a source "saw $1 million offered at Treasuries plus 165."

Industrials quiet

Although National Semiconductor's new notes were seen firming, the industrial sector, like others, was quieter on Wednesday, according to sources.

"With it being month/quarter end for most, there was a lot of cleaning up of positions and overall light activity," a trader told Prospect News.

Bank of Nova Scotia slows

Meanwhile, Bank of Nova Scotia added $1.75 billion to its existing senior notes, but not much was seen in secondary trading on the notes, a source said.

The offering included $1 billion of 2.25% notes due 2013, launched at Treasuries plus 50 bps, and $750 million of 3.4% notes due 2015 that priced at Treasuries plus 70 bps.

"Saw nothing on either," one source said.

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