KfW planning green bonds; funds see $371 million of inflows; spreads tighten

By Aleesia Forni

Virginia Beach, Sept. 19 – The investment-grade bond market closed another solid week on Friday with no new deals pricing.

The session did see KfW announce plans to bring to market an offering of fixed-rate green bonds, according to a FWP filed with the Securities and Exchange Commission.

Even with the two-day Federal Reserve policy meeting, which kept a lid on issuance mid-week, the market saw roughly $19.35 billion of investment-grade paper price.

“It was a non-event,” a source said of the Federal Open Market committee’s statement.

However, the week’s total fell just shy of what sources had expected to be $20 billion to $25 billion of supply.

In other news, corporate investment-grade funds saw inflows of $371 million for the week ended Sept. 17, down from last week’s $934 million of inflows.

The year-to-date total is roughly $53 billion of inflows.

Looking ahead, another busy primary market is expected for next week, with around $20 billion to $25 billion of supply forecasted.

“With the FOMC out of the way, next week should be wide open [for new issuance],” a source said.

The Markit CDX North American Investment Grade series 22 index firmed 1 basis point to a spread of 56 bps on Friday, 6 bps tighter compared to Monday’s close.

American Express Credit Corp.’s recently priced $700 million of 1.55% three-year notes traded 1 bp tighter on Friday, a source said.

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