Morning Commentary: Nucor, Harvest hold investor calls; investment-grade inflows drop

By Cristal Cody

Tupelo, Miss., April 20 – Investment-grade bond market activity stayed mostly quiet at the start of Friday’s session with some issuers considering new deals.

Charlotte, N.C.-based steel producer Nucor Corp. will hold fixed income investor calls on Friday for a possible bond offering, a source said. BofA Merrill Lynch, J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the arrangers.

Also on Friday, Canadian oil and natural gas company Harvest Operations Corp. (Aa2/AA) will continue the second day of a two-day session of fixed income investor calls for a dollar-denominated senior note offering, according to a market source. BofA Merrill Lynch and SMBC Nikko Securities America, Inc. are the arrangers.

Investment-grade supply was strong over the week and included new deals from Morgan Stanley, JPMorgan Chase Bank, NA, JPMorgan Chase & Co., Citigroup Inc., Syngenta AG, AXA Equitable Holdings, Inc. and Goldman Sachs Group Inc.

In the high-grade secondary market, trading volume climbed to $19.56 billion on Thursday from $18.75 billion on Wednesday, $17.4 billion on Tuesday and $15.62 billion on Monday, according to Trace.

ETF inflows dip

Elsewhere, inflows to U.S. high-grade funds and ETFs declined for the week ended April 18, Yuri Seliger, an analyst with BofA Merrill Lynch, said in a note released on Friday.

High-grade inflows decelerated to $860 million from $2.54 billion, Seliger said, citing data from EPFR Global and BofA Merrill Lynch Global Research.

“The decline was entirely driven by ETFs,” Seliger said.

ETF inflows dropped to $380 million from $2.23 billion in the prior week, while fund inflows improved to $470 million this week from $31 million.

Inflows declined across maturities for short-term to $260 million from $850 million in the previous week and outside of short-term high-grade to $600 million for the week ended Wednesday from $1.69 billion in the previous week, according to the note.

Lipper US Fund Flows reported inflows of $1.54 billion for corporate investment-grade funds for the week ended April 18, down from $3.35 billion of inflows reported for the week ended April 11.

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