Primary quiets to close short week; activity to pick up; Phillips 66, Boeing notes tighten

By Aleesia Forni and Cristal Cody

Virginia Beach, Feb. 20 – The primary market was empty of new issuance on Friday to close out the shortened week.

In total, the high-grade bond primary hosted around $14.1 billion of new issuance, falling short of what was predicted to be around $20 billion of supply.

Also this week, Lipper reported inflows of $2.985 billion into corporate high-grade bond funds for the week ended Feb. 18.

The total was up slightly from last week’s inflows of $2.335 billion, bringing the year-to-date total inflows to $18.166 billion.

With the current supportive market conditions, sources are expecting a pick-up in the market’s pace in the coming sessions.

An active week is predicted to close out the month of February, with around $25 billion to $30 billion expected to price next week.

New investment-grade bonds ended the week stronger, while credit spreads firmed about 1 basis point over the day.

The Markit CDX North American Investment Grade index closed 1 bp tighter at a spread of 63 bps.

Phillips 66 Partners LP’s senior notes (/BBB/) priced in three parts on Wednesday tightened during the session.

Boeing Co.’s 2.5% senior notes due 2025 headed out better than where the issue priced on Wednesday.

Phillips 66 stronger

Phillips 66 Partners’ 2.646% notes due 2020 traded late Friday afternoon at 97 bps offered, a trader said.

The company sold $300 million of the notes at Treasuries plus 112 bps on Wednesday.

The tranche of 3.605% notes due 2025 firmed to 142 bps offered late afternoon.

Phillips 66 Partners sold $500 million of the notes at Treasuries plus 152 bps.

The long tranche of 4.68% notes due 2045 tightened to 193 bps bid, 189 bps offered, the trader said.

Phillips 66 sold $300 million of the bonds at 197 bps over Treasuries in Wednesday’s offering.

The Houston-based master limited partnership owns, operates, develops and acquires crude oil and refined petroleum product.

Boeing firms

Boeing’s 2.5% notes due 2025 firmed to 61 bps bid, 58 bps offered on Friday, a trader said.

The company sold $250 million of the notes (A2/A/A) on Wednesday at a spread of Treasuries plus 65 bps.

The aerospace company is based in Chicago.

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