Camden Property, Airgas test primary as others wait; traders focus on new deals in low volume

By Andrea Heisinger

New York, May 31 - Two new bonds priced in the high-grade market on Tuesday as issuers trickled in following the long weekend.

Camden Property Trust and Airgas, Inc. each sold deals as other companies felt out the market tone ahead of possible deals for Wednesday or later in the week.

Camden Property sold $500 million of debt split evenly between tranches due 2021 and 2023. The proceeds are being used to repay a $500 million term loan.

Also in the market was Radnor, Pa.-based Airgas with a $250 million sale of five-year notes.

A deal was announced by telecommunications company Qwest Corp. The unit of CenturyLink, Inc. is planning to sell $200 million of $25-par senior notes on Wednesday.

At the end of the previous week, sources were hesitant to name an issuance range for this week due to factors such as coming off a long weekend where an event could happen to make the tone go downhill.

"We were seeing some issuers hold off, but they'll probably come tomorrow or later," a syndicate source said. "It's hard to issue the first day [after a holiday weekend]."

Greece was back in the news as it could be taking on more loans as part of a rescue package. There was also a warning from Moody's that Japan's debt could be downgraded as an aftereffect from the earthquake and tsunami earlier this year.

"That definitely had an impact on the market," a source said at the end of the day. "I mean the tone was OK, but the deals weren't great. They were OK, but not great."

More issuers are expected to try to jump into the market on Wednesday after go, no-go calls are made in the morning.

In the secondary market, traders were kept busy with trades of new and recent paper, sources said.

"There's a lot of month-end trades," said one trader in the industrial sector. "A lot of month-end buying of recent deals."

Among those was the new five-year note from Airgas that was seen tightening by 5 bps or more after pricing.

A second trader called the secondary "dead" and said that overall Trace volume was about $8.862 billion for the day. The market was about 1.5 basis points tighter overall, the trader added.

Airgas sells five-years

Industrial and specialty gas maker Airgas sold $250 million of 2.95% five-year senior notes (Baa2/BBB) at a spread of 130 bps over Treasuries, a market source said.

The deal was sold at the tight end of guidance in the 135 bps area, plus or minus 5 bps.

Bookrunners were Bank of America Merrill Lynch, Goldman Sachs & Co. and Wells Fargo Securities LLC.

Proceeds are going for general corporate purposes, including funding acquisitions, repaying credit facility borrowings and the repurchase of stock.

The notes were seen trading tighter almost immediately after pricing, sources said. They were quoted at a 123 bps bid, with an offer of 118 bps.

Later another trader said they were "about 5 bps tighter" and added that there were a fair amount of smaller trades being made of the notes.

The maker of specialty and industrial gases is based in Radnor, Pa.

Camden offers two tranches

Camden Property Trust sold $500 million of senior notes (Baa1/BBB/BBB) in two parts on Tuesday, a syndicate source said.

The $250 million of 4.625% 10-year notes priced at a spread of Treasuries plus 165 bps.

A $250 million tranche of 4.875% 12-year notes sold at 195 bps over Treasuries.

Active bookrunners were Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC.

Proceeds, along with cash at hand, are going to repay a $500 million term loan.

In the secondary, each of the new bonds was quoted as trading at their pricing levels on the bid side, a source said.

The real estate investment trust for apartment communities is based in Houston.

Qwest plans $25-par notes

Qwest plans to issue $200 million of $25-par senior notes, according to a prospectus filed with the Securities and Exchange Commission on Tuesday.

Price talk on the notes (Baa3/BBB-/BBB-) is 7.375% to 7.5%, a market source told Prospect News. The source said the deal will likely price Wednesday.

The notes will mature June 1, 2051.

Wells Fargo Securities LLC is physical bookrunner with Bank of America Merrill Lynch, Barclays Capital Inc., Citigroup Global Markets Inc., Morgan Stanley & Co. Inc. and UBS Securities LLC as joint bookrunners.

Proceeds will be used to redeem early $825 million principal amount of 7.875% notes due 2011.

Qwest is a telecommunications subsidiary of CenturyLink, based in Monroe, La.

Recent bonds active

Notes from deals priced the previous week by Caterpillar Inc. and Hewlett-Packard Co. were among the day's most actively traded, a source said.

A 3.9% note due 2021 from Caterpillar was part of a $4.5 billion mega-deal. It priced at 85 bps over Treasuries and was quoted trading Tuesday about 7 bps wider at 92 bps.

Also among the most actives were HP's 2.65% notes due 2016. It was part of a $5 billion sale and was priced at 90 bps over Treasuries, and was quoted trading tighter at 83 bps, the source said.

-Stephanie N. Rotondo contributed to this review

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