Ford, BNY Mellon, IADB, Freddie Mac tap primary; bank supply eyed; funds, ETF post inflows

By Cristal Cody

Tupelo, Miss., April 17 – Both investment-grade financial and sovereign, supranational and agency issuers tapped the primary market on Friday.

Split-rated issuer Ford Motor Co. (Ba2/BB+/BBB-) priced $8 billion of notes in three tranches tighter than talk.

In addition, Bank of New York Mellon Corp. priced $1.25 billion of five-year senior medium-term notes.

In the SSA space, the Inter-American Development Bank sold $4.25 billion of three-year global sustainable development notes.

Also, Freddie Mac priced $3 billion of five-year Reference Notes.

High-grade issuers have sold more than $60 billion of bonds over the week, beating forecasts of up to about $50 billion of deal volume.

Supply is expected to remain strong next week with more bank paper eyed, syndicate sources said.

About $40 billion to $50 billion of investment-grade issuance is forecast for the week ahead.

JPMorgan Chase & Co. priced a $10 billion four-part offering of fixed-to-floating-rate notes (A2/A-/AA-) on Wednesday in the largest bank deal on record.

The notes were last seen flat to modestly softer but better than issuance in the secondary market, a source said.

The financial services company’s 2.083% notes due April 22, 2026 traded about 5 basis points tighter than where the issue priced at par to yield a spread of Treasuries plus 175 bps.

Initial talk was in the Treasuries plus 185 bps area.

Meanwhile, high-grade bond funds and ETFs reported a large inflow of $6.48 billion for the past week ended Wednesday following five consecutive weeks of outflows, according to a BofA Securities, Inc. research note released Friday that cites tallies from corporate bonds, agencies, Treasuries and mortgages.

The inflows were driven by an increase in high-grade ETF inflows to $5.69 billion from $1.3 billion in the prior week, while investment-grade funds saw an inflow of $800 million after $5.53 billion of redemptions a week earlier, BofA credit strategist Yunyi Zhang said.

High-grade short-term funds reported inflows of $1.95 billion following outflows of $790 million in the previous week. The excluding short term space had flows of $4.53 billion in the past week after reporting outflows of $3.43 billion a week ago.

The Markit CDX North American Investment Grade 33 index headed out more than 1 bp tighter on the day at a spread of 86.93 bps.

The iShares iBoxx Investment Grade Corporate Bond ETF closed Friday up 0.33% at 130.56.

The PIMCO Investment Grade Corporate Bond Index ETF improved 0.27% to 110.84.

BNY Mellon sells $1.25 billion

Bank of New York Mellon priced $1.25 billion of 1.6% senior medium-term notes due April 24, 2025 (A1/A/AA-) on Friday at a spread of Treasuries plus 125 bps, according to a market source.

The notes were initially talked to print in the Treasuries plus 155 bps spread area.

Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and BNY Mellon Capital Markets LLC were the bookrunners.

Bank of New York Mellon is a financial products and services company based in New York.

IADB prices $4.25 billion

Inter-American Development Bank (Aaa/AAA/) priced $4.25 billion of 0.5% three-year global sustainable development notes on Friday at mid-swaps plus 15 bps, or a spread of Treasuries plus 27.7 bps, according to a market source.

Initial price talk was in the mid-swaps plus 19 bps area.

Barclays, HSBC Securities (USA) Inc., Nomura Securities International, plc and RBC Capital Markets, LLC were the bookrunners.

The provider of development financing for Latin America and the Caribbean is based in Washington, D.C.

Freddie Mac sells $3 billion

Freddie Mac priced $3 billion of 0.375% Reference Notes due Feb. 12, 2025 at 99.75 to yield 0.459% on Friday, according to a news release.

The notes priced 22 bps more than the yield on three-year U.S. Treasury notes.

Citigroup, J.P. Morgan and TD Securities LLC were the bookrunners.

The government-backed mortgage lender is based in McLean, Va.

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