High-grade supply quiet; few deal windows expected ahead; fund flows soft; Amex, BP firm

By Cristal Cody

Tupelo, Miss., Nov. 2 – Primary action stayed quiet on Friday with the high-grade bond market closing the week in line with syndicate deal forecasts.

Supply is expected to stay relatively quiet but solid in the week ahead with syndicate sources estimating about $15 billion to $20 billion of issuance.

Few deal windows are expected with the mid-term U.S. elections on Tuesday, Federal Reserve monetary policy meeting on Wednesday and Thursday and the upcoming Veterans Day holiday weekend, sources report.

For the week ended Oct. 31, Lipper US Fund Flows reported outflows of $3.75 billion for corporate investment-grade funds, compared to inflows of $415 million in the previous week.

Outflows from bond funds and ETFs declined to $1.9 billion this week from $3.42 billion a week earlier, BofA Merrill Lynch analyst Yuri Seliger said in a research note released on Friday.

In the secondary market, new issues priced during the week were mostly better, according to market sources.

American Express Co.’s $3 billion of senior notes (A3/BBB+/A) priced in three tranches on Thursday tightened about 0.5 basis point to 6 bps in secondary trading.

BP Capital Markets America Inc.’s $2 billion of guaranteed senior notes priced on Thursday tightened about 5 bps to 8 bps in secondary trading.

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