Sempra, British Sky tap primary; week seen busy; secondary volume at nearly zero amid volatility

By Andrea Heisinger

New York, Nov. 17 - Sempra Energy and British Sky Broadcasting Group plc priced investment-grade bond issues Monday to start a week that's expected to see a steady stream of deals.

It is one of the last issuance windows before the Thanksgiving and Christmas holidays, sources said.

The secondary was particularly quiet, with very little trading going on, a trader said.

Sempra does upsized deal

Sempra Energy priced an upsized $750 million offering of notes in five- and 10-year tranches.

The issue was increased to include a five-year tranche.

A source close to the issue said the expansion of the offering to a second tranche was intended to satisfy demand.

"The 10 year blew out quite a bit," he said. "There were about $2 billion on the books. Then we launched a five year."

He added that it was "a good transaction."

The $250 million of 8.9% five-year notes priced at 99.608 to yield 9%, or Treasuries plus 670 basis points.

The tranche was talked at 9%, which was in line with pricing.

The $500 million of 9.8% 10-year notes priced at 99.552 to yield 9.875%, or Treasuries plus 618.9 bps.

This tranche also priced line with talk of 9.875%.

Bookrunners were Banc of America Securities LLC, Deutsche Bank Securities, Goldman Sachs & Co. and RBS Greenwich Capital.

British Sky prices private deal

London-based TV provider British Sky Broadcasting Group priced $600 million of 10-year notes under Rule 144A Monday.

The 9.5% notes priced at 99.834 to yield 9.527%, or Treasuries plus 587.5 bps.

Bookrunners were Barclays Capital Inc. and J.P. Morgan Securities Inc.

Week seen busy

Companies looking to get issues priced before year's end will be looking at this week despite continued volatility, sources said.

"It could get busy," a source said.

Recent issuers have mostly been well-known names and utilities - a trend that is likely to continue in the current environment.

"Things are still kind of ugly out there, but we're still seeing people issue," a source said. "You're not going to get a lot of interest in some small low-B company."

Sources were unsure of any names that may be looking at the market, saying that there remains a substantial backlog and it's hard to tell who will decide to price a deal on a given day.

Secondary at standstill

Trading was at "absolutely zero volume" late Monday afternoon, a trader said. There was "absolutely nothing going on," he added, despite the day's two issues.

There were hardly any trades being made, and the three issues from Friday were at the same levels, he said.

"People are taking a breather," he said. "There's a lot of volatility."

Mortgage names top trading

Two mortgage-related companies were seen at the top of the most-traded list early Monday afternoon.

The 4.75% notes due 2013 from Household Finance Corp. were seen as the most actively traded, with SLM Corp. not far behind with an issue due 2011.

Bank, broker CDS mostly wider

Bank and broker credit-default swaps were seen somewhat mixed Monday afternoon, a trader said, although leaning toward the wider end.

Bank levels were 5 to 10 bps wider, he said, while broker CDS were unchanged to 15 bps wider.

Xerox, GS big movers

Xerox Corp. was seen as one of the day's big movers, with its 6.4% bonds due 2016 widening by more than 70 bps by late afternoon.

Goldman Sachs Group Inc.'s 6.15% bonds due 2018 were seen moving in by more than 15 bps. The company announced Monday that seven of its executives would not be receiving bonuses this year.

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