National Rural sells notes; Fairfax, International Development plan bonds; CVS tightens

By Cristal Cody

Tupelo, Miss., April 12 – National Rural Utilities Cooperative Finance Corp. tapped the high-grade bond market on Thursday with a $150 million offering of three-year fixed-rate notes.

The primary market otherwise was quiet with no other reported bond issuance, but several issues are in the deal pipeline.

Fairfax Financial Holdings Ltd. on Thursday marketed a Rule 144A and Regulation S sale of senior notes.

The International Development Association (Aaa/AAA/) intends to bring an inaugural bond offering to the primary market.

New issuance also is expected to follow roadshows being held by Syngenta AG and Ausgrid Finance Pty Ltd.

Supply has thinned to less than $7 billion of reported high-grade bond volume week to date. Syndicate sources forecasted about $10 billion to as much as $17 billion of issuance for the week.

In the secondary market on Thursday, CVS Health Corp.’s senior notes (Baa1/BBB+/) priced as part of a $40 billion nine-part deal in March to fund its merger with Aetna Inc. tightened. The notes are trading more than 20 basis points better than issuance.

General Mills, Inc.’s 4.2% senior notes due 2028 priced earlier in April were unchanged.

The Markit CDX North American Investment Grade 30 index closed the day about 1 bp tighter at a spread of 62 bps.

CVS tightens

CVS Health’s 4.3% notes due March 25, 2028 tightened 7 bps to 139 bps bid in secondary trading on Thursday, a source said.

The notes last traded at 100.92 during the session, compared to 100.99 on Wednesday, according to another market source.

The 10-year notes were sold in a $9 billion tranche on March 6 at 98.594 to yield 4.475%, or a spread of Treasuries plus 160 bps.

The company’s 5.05% notes due March 25, 2048 firmed 2 bps to head out at 167 bps bid.

The notes were seen at 105.21, down from 106.07 on Wednesday.

The Woonsocket, R.I.-based retail pharmacy chain and pharmacy benefits manager sold $8 billion of the bonds at 99.43 to yield 5.087%, or a Treasuries plus 195 bps spread.

General Mills stable

General Mills’ 4.2% notes due April 17, 2028 traded flat on the day at 132 bps bid, according to a market source.

The bonds were last seen at 100.57, down 101.03 on Wednesday

The company sold $1.4 billion of the notes (Baa2/BBB/) at a spread of 145 bps over Treasuries as part of a $6.05 billion eight-part deal on April 3. The notes priced at 99.798 to yield 4.225%.

The maker of consumer food products is based in Minneapolis.

Funds add $3.35 billion

Investment-grade corporate mutual and exchange-traded funds recorded a substantial $3.346 billion inflow for the latest week, according to fund-flow statistics generated by AMG Data Services Inc.

That came after a $1.554 billion gain for the week to April 4, as reported by the Arcata, Calif.-based unit of Thomson Reuters Corp’ s Lipper analytics division.

The latest influx of cash is the fifth consecutive positive number for the investment-grade funds.

They previously saw a $0.438 billion inflow for the week to March 28 and a $3.484 billion inflow the previous week.

Those gains, in turn, followed a $2.316 billion inflow which more than reversed the rare $740 million net outflow figure that preceded it.

There was also an outflow during the Feb. 14 week but otherwise it has been all cash additions, including a 21-week stretch before the Feb. 14 week that dated back to mid-September, according to a Prospect News analysis of the data.

The latest gain raises the year-to-date inflow for the IG corporates to $34.48 billion from $31.13 billion the previous week, setting a new peak level for the year so far.

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