Choice Hotels, Tokyo Metro, IFC tap primary; Japan Agency markets bonds; inflows rise

By Cristal Cody

Tupelo, Miss., July 9 – Corporate and sovereign, supranational and agency issuers tapped the high-grade primary market over Thursday’s session, pushing week-to-date deal volume to about $36 billion.

Choice Hotels International, Inc. sold an upsized $450 million offering of senior notes due Jan. 15, 2031 (Baa3/BBB-/) following fixed income investor calls on Wednesday.

In SSA issuance, Tokyo Metropolitan Government (/A+/) priced $1.5 billion of five-year senior notes.

International Finance Corp. (Aaa/AAA/) sold $2 billion of five-year global notes.

Additional corporate and SSA issuers also are marketing bonds, sources report.

Carpenter Technology Corp. is expected to price $400 million of eight-year split-rated senior notes (Ba3/BBB-/) on Friday.

Retail Properties of America, Inc. (Baa3/BBB-/BBB+) also is holding fixed income investor calls for a possible bond offering.

On Friday, Japan International Cooperation Agency plans to hold fixed income investor calls for a dollar-denominated registered offering of 10-year guaranteed bonds.

More than $17 billion of corporate high-grade bonds and nearly $19 billion of SSA notes have priced week to date.

About $20 billion to $25 billion of deal volume was expected for the week.

High-grade flows increase

Investment-grade corporate fund inflows remained strong for the past week ended Wednesday at $7.18 billion, up from $7.07 billion in the previous week and $4.26 billion in the week prior, according to Refinitive Lipper US Fund Flows.

Elsewhere, Cusip Global Services announced on Thursday that corporate Cusip request volume surged in June in the first monthly gain since April for corporate issuers.

North American corporate requests totaled 5,072 in June, up 17.3% from May, according to the report.

The increases were driven by a 38.8% monthly jump in requests for corporate equity identifiers and a 15.5% monthly rise in requests for corporate debt identifiers.

“The June surge in corporate requests followed a significant 31.9% decline in request volume in May,” the agency said.

Corporate Cusip requests are up 9.1% year over year.

Investment-grade credit spreads leaked more than 1 basis point wider over the session.

The Markit CDX North American Investment Grade 33 index closed at a spread of 74.87 bps.

In the secondary market, new issues are mostly trading wrapped around issuance to moderately tighter this week, a market source said.

Ares Capital Corp.’s $750 million of 3.875% senior notes due Jan. 15, 2026 (Baa3/BBB-/BBB) priced on Wednesday firmed 9 bps in secondary trading.

The notes were priced at a spread of Treasuries plus 370 bps.

Initial price talk was in the Treasuries plus 387.5 bps area.

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