Morning Commentary: Equifax offers notes; Western Union continues calls; flows soften

By Cristal Cody

Tupelo, Miss., Nov. 15 – Equifax Inc. is continuing the week’s investment-grade deal momentum into Friday with a registered offering of fixed-rate senior notes.

The company held fixed income investor calls on Thursday.

In other market action on Friday, Western Union Corp. (Baa2/BBB/BBB+) continues fixed income investor calls and meetings that started on Wednesday, a source said.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the arrangers.

Investment-grade supply has been heavy over the short market week with about $48 billion of bonds priced in the past three sessions.

About $45 billion to $50 billion of supply was forecast, according to market sources.

Looking at bond buying in the high-grade space, including corporate bonds, agencies, Treasuries and mortgages, the past week ended Wednesday saw weaker inflows.

“Within fixed income, flows were weaker for both high grade and high yield, partially offset by a smaller outflow from government bonds,” Yuri Seliger, a credit strategist with BofA Securities, Inc., said in a research note released Friday.

High-grade inflows slowed to $2.42 billion from $3.71 billion in the previous week, led by short-term funds and ETFs, according to the note.

Inflows to the short-term high-grade space dropped to $870 million from $2.11 billion a week ago, while excluding short-term inflows declined to $1.55 billion from $1.6 billion.

Inflows fell to $2.2 billion this week from $3.07 billion in the prior week for high-grade funds. Investment-grade ETF inflows softened to $230 million from $640 million, the note said.

Overall inflows to U.S. bond funds and ETFs was down for a third consecutive week at $2.47 billion from a $4.22 billion inflow in the previous week.

“This past week's inflow was the lowest since the week of September 18,” Seliger said. “Flows typically follow returns, and a slowdown in bond buying would be consistent with the increase in interest rates since early October.”

In contrast, stock purchases have remained steady with a $5.62 billion inflow this week, up slightly from a $5.36 billion inflow in the prior week, according to the report.

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