Light high-grade supply eyed on Fed backdrop; new bonds mostly firm; inflows stay positive

By Cristal Cody

Tupelo, Miss., Sept. 21 – The investment-grade primary market quieted on Friday following more than $34 billion of issuance over the week.

Supply came in higher than expected with market sources forecasting about $25 billion to $30 billion of volume.

Month to date, new issuance has been strong with more than $124 billion of bonds priced.

In the week ahead, volume is expected to be lighter and front-loaded due to the Federal Reserve’s monetary policy meeting and press conference on Wednesday. A rate hike is anticipated by market participants.

About $20 billion to $25 billion of investment-grade bond issuance is projected for the week ahead, according to syndicate sources.

Elsewhere on Friday, International Flavors & Fragrances Inc. (Baa3/BBB/) continued a two-day roadshow for a dollar-denominated multiple-tranche offering of notes, according to a market source.

The market has digested new issues over the week with a majority of the bonds trading tighter in the secondary market, sources report.

Nestle Holdings Inc.’s $8 billion of bonds (Aa2/AA-/) priced in six tranches in a Rule 144A and Regulation S offering on Monday traded on Friday flat to about 5 basis points better than issuance.

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