March high-grade bond volume strong; lighter supply eyed for holiday week; inflows drop

By Cristal Cody

Tupelo, Miss., March 22 – Investment-grade issuers took Friday off after bringing around $28 billion of notes in a week that saw issuance pause midweek due to the Federal Reserve rate decision.

A few deals were in the works, though, with several companies holding fixed income investor calls over the day for expected bond deals.

London Stock Exchange Group plc held fixed income investor calls and a roadshow on Friday for dollar-denominated three- and 10-year senior notes, according to a market source.

SiriusPoint Ltd. also was expected to complete two days of fixed income investor calls for Securities and Exchange Commission-registered tier 3 notes on Friday, a market source said.

The week’s corporate bond supply was in line with market expectations for around $25 billion to $30 billion of issuance, sources reported.

The biggest sized deals came on Tuesday and were trading mostly better in the secondary market.

UnitedHealth Group Inc.’s $6 billion six-tranche offering of senior notes (A2/A+/A) that priced on Tuesday traded flat to about 4 basis points tighter, a source said.

BAE Systems plc’s $4.8 billion five-part offering of notes (Baa1/BBB+/BBB+) firmed about 2 bps to 7 bps across the tranches.

March high-grade issuers already have priced more than $115 billion of paper. About $135 billion of deal volume was expected for the month.

Issuance is expected to slow in the short Good Friday and Easter holiday week, sources reported Friday.

About $20 billion of volume is anticipated with supply likely front-loaded in the week ahead.

Funds, ETF inflows dip

Inflows in short-intermediate corporate investment-grade debt funds/ETFs declined to $1.41 billion in the week ended Wednesday from $1.61 billion a week earlier, according to Refinitiv Lipper U.S. Fund Flows.

Net inflows year to date total over $23 billion.

Meanwhile, inflows in high-grade bond funds and ETFs focused on high-grade corporates, agencies, mortgages and Treasuries dropped to $2.95 billion over the past week ended Wednesday from $4.17 billion in the prior week and $8.81 billion a week earlier, according to a BofA Securities note.

Investment-grade funds posted inflows of $2.41 billion for the week after outflows of $240 million in the previous week.

ETF inflows were $550 million this past week, down from $4.4 billion of inflows a week ago.

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