Morning Commentary: Export Development Canada offers notes; Otis to wrap deal calls

By Cristal Cody

Tupelo, Miss., Feb. 14 – Export Development Canada is marketing a dollar-denominated offering of three-year global notes in the high-grade primary market on Friday.

The notes are initially talked to price in the mid-swaps plus 7 basis points area, a source said.

Also on Friday, Otis Worldwide Corp., which along with Carrier Global Corp. is being spun off from United Technologies Corp., is expected to conclude fixed income investor calls for a possible $5.3 billion senior note (Baa2/BBB) offering.

Carrier Global priced a $9.25 billion six-part offering of senior notes on Thursday as part of its spinoff from United Technologies. The deal attracted a final order book of more than $40 billion.

High-grade issuers have priced more than $29 billion of bonds week to date, in line with the $25 billion to $35 billion of supply anticipated for the week, according to syndicate sources.

Elsewhere, high-grade inflows were strong “across the board” for bonds and stocks in the past week ended Wednesday, Yuri Seliger, a credit strategist for BofA Securities, Inc., said in a report released Friday.

Total inflows to the fixed income market soared to $13.91 billion, the highest this year and third largest on record, from $11.7 billion in the prior week, Seliger said.

“High grade inflows remained elevated, but below the record level a week earlier,” he said. “This decline was offset by higher inflows to high yield, munis and mortgages.”

Inflows to high grade declined to $7.27 billion from $9.32 billion in the previous week on the back of slower inflows to short-term and excluding short-term, according to the report.

Short-term inflows fell to $2.63 billion this past week from $2.73 billion.

Excluding short-term, inflows dipped to $4.59 billion from $6.58 billion.

The decline was driven by funds, with inflows down to $3.72 billion from $5.71 billion a week earlier, Seliger said.

ETF inflows were slightly lower at $3.55 billion from $3.6 billion in the previous week.

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