RBC, C.R. Bard, Sydney Airport sell in 'decent' tone; new, recent issues firm in secondary

By Aleesia Forni and Andrea Heisinger

New York, Oct. 25 - A mix of issuers from different sectors sold high-grade bonds on Thursday, including the Royal Bank of Canada and C.R. Bard, Inc.

RBC priced $1 billion of three-year global bonds.

Medical device maker C.R. Bard priced $500 million of paper due 2018.

Catholic Health Initiatives priced $1.5 billion of taxable bonds in three maturities to help pay for an acquisition, among other purposes.

There was a reopening of 3.9% notes due 2023 by Sydney Airport Finance Co. Pty. Ltd. to add $225 million to an original amount sold earlier in October.

Yet another new offering was announced in the preferred stock market. Regions Financial Corp. sold $500 million of $25-par noncumulative perpetual preferreds. The size was increased from $250 million.

Spreads on financial paper were lower for the first time in about a week, a market source said.

"That maybe was why RBC jumped in," the source added.

The week has garnered a little more than $8 billion in corporate issuance - far below the $15 billion figure expected at the top of the week.

"The tone was decent today, but I think we'll see more next week," a source said late in the day.

The Markit CDX Series 18 North American Investment Grade index tightened 1 basis point to a spread of 98 bps on Thursday.

C.R. Bard's new notes were 6 bps tighter near the end of the session, while RBC's notes firmed 2.5 bps.

In other recent deals, Marathon Oil Corp.'s $2 billion of notes also tightened on Thursday.

The three-tranche new issue from Reynolds American Inc. firmed 2 bps to 17 bps, while Cargill Inc.'s $450 million issue tightened 1 bp.

The secondary market saw activity in Goldman Sachs' bonds due 2037, which tightened 4 bps from Wednesday's levels.

RBC sells short bond

RBC priced $1 billion of 0.8% three-year global notes (Aa3/AA-/AA) to yield Treasuries plus 37.5 bps, according to an FWP filing with the Securities and Exchange Commission.

The notes due 2015 traded tighter in the secondary market, going out late afternoon at 35 bps bid, 33 bps offered, a trader said.

Goldman Sachs & Co., nabSecurities LLC and RBC Capital Markets LLC were the bookrunners.

RBC was last in the U.S. bond market with a $2.5 billion sale of five-year covered bonds on Sept. 12.

The financial services company is based in Toronto.

Bard prices $500 million

C.R. Bard priced $500 million of 1.375% senior notes due 2018 (A3/A/) at a spread of 60 bps over Treasuries, a source close to the deal said.

The notes were quoted at 54 bps bid, 52 bps offered late in the day.

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

Proceeds will be used for general corporate purposes, including commercial paper repayment and acquisitions.

C.R. Bard, a Murray Hill, N.J.-based maker of medical devices, was last in the bond market with a $750 million offering of five-year notes and 10-year bonds on Dec. 15, 2010.

Sydney Airport reopens notes

Sydney Airport Finance was in the market with a reopening of 3.9% senior secured notes due 2023 to add $225 million, a market source said.

The notes (Baa2/BBB/BBB) were priced at a spread of Treasuries plus 200 bps.

Total amount outstanding will be $825 million, including $600 million priced on Oct. 16 at 220 bps over Treasuries.

Bookrunners were Bank of America Merrill Lynch, BNP Paribas Securities Corp., J.P. Morgan Securities LLC and RBS Securities Inc.

The sale was done under Rule 144A and Regulation S without registration rights.

The financing company is based in Sydney, Australia.

Catholic Health taps market

Catholic Health Initiatives priced $1.5 billion of taxable bonds (Aa3/AA-/) in three tranches, a source away from the trade said.

A $250 million tranche of five-year notes sold at a spread of 80 bps over Treasuries.

There was a $500 million tranche of 10-year notes priced at a spread of Treasuries plus 115 bps.

Finally, a $750 million tranche of 30-year bonds sold at a spread of Treasuries plus 140 bps.

All of the notes were priced about 20 bps tighter than guidance, the source said.

Full terms of the sale were not available at press time.

JPMorgan and Morgan Stanley & Co. LLC were the bookrunners.

Proceeds will go toward covering the $500 million to $550 million cost of acquiring the other half of Alegent Creighton Health from Catholic Health's co-owner, along with other general corporate purposes, including ambulatory and physician expansion and technology investments.

The non-profit health organization is based in Englewood, Colo.

Regions Financial prices

Regions Financial priced an offering of $500 million 6.375% series A noncumulative perpetual preferred stock, the company said in an FWP filed with the SEC.

On Tuesday, the Birmingham, Ala.-based bank said it was considering such an issuance, provided market conditions remained favorable.

Price talk was originally around 6.625%, a trader said. However, pricing was then revised to 6.375% to 6.5%.

It's doing quite well," a trader said at midday, noting that the higher dividend was attracting investors.

"All these little banks are doing better than expected," he remarked.

The trader added that the deal had no selling group, seeing paper at $24.92 bid, $24.95 in the gray market as of midday.

After pricing, a market source said the issue began to fall after the company pushed the pricing in.

He quoted the securities at $24.73 bid, $24.80 offered.

Regions has applied to list the new issue on the New York Stock Exchange under the ticker symbol "RFPA."

Joint bookrunners are Morgan Stanley, Goldman Sachs, JPMorgan, UBS Securities LLC and Wells Fargo.

Proceeds will be used for general corporate purposes, which may include the redemption of higher coupon trust preferreds.

Marathon Oil firms

Marathon Oil's $1 billion tranche of 0.9% three-year notes was quoted at 44 bps bid, 41 bps offered on Thursday.

The notes were trading at 42 bps bid, 40 bps offered earlier in the session.

Marathon sold the notes at Treasuries plus 50 bps on Wednesday.

The company's $1 billion of 2.8% 10-year notes traded at 103 bps bid, 101 bps offered near the end of the session, flat from levels seen earlier in the day.

The notes priced with a spread of 105 bps over Treasuries.

The international energy company for oil sands mining and gas exploration and production is based in Houston.

Reynolds issue tightens

In another deal from Wednesday, Reynolds American's $450 million tranche of 1.05% three-year notes were quoted at 53 bps bid, 50 bps offered on Thursday.

The notes sold with a spread of Treasuries plus 70 bps.

Another trader saw the $1.1 billion of 3.25% 10-year notes at 142 bps bid, 139 bps offered, 8 bps tighter from the previous session.

The $1 billion tranche of 4.75% 30-year bonds traded at 178 bps bid, 175 bps offered. The notes had traded at 175 bps bid, 170 bps offered earlier on Thursday.

Reynolds priced the bonds at 190 bps over Treasuries.

The holding company for makers of tobacco products is based in Winston-Salem, N.C.

Cargill bonds eyed

Cargill's $450 million issue of 4.1% 30-year bonds, which also sold on Wednesday, were quoted at 119 bps bid, 115 bps offered, a trader said.

The notes sold at a spread of Treasuries plus 120 bps.

The privately held grain and agriculture products company is based in Minnetonka, Minn.

Goldman Sachs active

Goldman Sachs' 30-year bonds due 2037, which were among the day's most actively traded securities, closed the session at 315 bps bid, 4 bps tighter compared to levels seen late Wednesday.

Goldman priced the $2.5 billion 6.75% bonds at 190 bps over Treasuries in September 2007.

Stephanie N. Rotondo and Cristal Cody contributed to this review

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