Bacardi, Nucor, Harvest eye deals; strong volume forecast; new bank, financial paper mixed

By Cristal Cody

Tupelo, Miss., April 20 – The high-grade bond market stayed mostly quiet on Friday, though several issuers are considering new deals.

Bacardi Ltd. plans to hold fixed-income investor calls on Monday for a dollar-denominated issue.

On Friday, Charlotte, N.C.-based steel producer Nucor Corp. held fixed-income investor calls 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/) wrapped a two-day session of fixed income investor calls for a dollar-denominated senior note deal, according to a market source. BofA Merrill Lynch and SMBC Nikko Securities America, Inc. are the arrangers.

Volume is expected to stay strong in the week ahead as companies exit earnings blackout periods. Market sources forecast about $25 billion to $30 billion of supply.

New bank and financial paper priced during the week headed out on Friday mixed in secondary trading.

Morgan Stanley’s $3.75 billion of global medium-term fixed/floating rate senior notes (A3/BBB+/A) placed in the previous session traded flat to about 4 basis points tighter, a source said.

JPMorgan Chase Bank, NA’s $3.5 billion of notes priced on Thursday firmed about 2 bps to 3 bps.

JPMorgan Chase & Co.’s $4.5 billion three-part offering of notes priced at the start of the week were mixed with the fixed-rate notes softer.

The Markit CDX North American Investment Grade 30 index softened modestly to end at a spread of 60 bps.

Bacardi in deal pipeline

Bacardi (Ba1/BBB-/BBB-) will hold fixed-income investor calls on Monday for a dollar-denominated Rule 144A and Regulation S transaction, according to a market source.

BofA Merrill Lynch, Barclays and Citigroup Global Markets Inc. are the arrangers.

Bacardi is a privately-held spirits company based in Hamilton, Bermuda.

Chase Bank firms

JPMorgan Chase Bank’s 3.086% fixed-to-floating-rate notes due April 26, 2021 (Aa3/A+/AA-) traded on Friday at 63 bps bid, 61 bps offered, a source said.

JPMorgan priced $2.2 billion of the notes on Thursday at a spread of Treasuries plus 65 bps. The notes convert to a floating rate of Libor plus 35 bps after the initial fixed-rate period.

The banking and financial services holding company is based in New York.

JPMorgan mixed

In the secondary market, JPMorgan Chase’s $500 million of floating-rate notes due April 23, 2024, priced at Libor plus 73 bps on Monday, traded at 72 bps bid, 70 bps offered, a source said.

The company’s 3.559% notes due April 23, 2024 softened to 90 bps bid, 87 bps offered in secondary trading.

JPMorgan Chase priced $1.75 billion of the fixed-rate notes on Monday at a spread of 88 bps over Treasuries.

The financial services firm is based in New York.

ETF inflows drive 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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