High-grade primary action wanes; inflows up fourth straight week; CIBC, Charter notes firm

By Cristal Cody

Tupelo, Miss., Dec. 13 – Investment-grade supply remained quiet over Friday’s session with little activity expected for the remainder of the year.

Some opportunistic issuers may still tap the primary market before the year closes, a source said.

Week to date, nearly $5 billion of bonds have priced, mostly in line with the $5 billion to $10 billion of issuance predicted for the week.

The week saw strong inflows to investment-grade funds and ETFs for the fourth consecutive week, according to a BofA Global Research note released Friday.

High-grade inflows, including corporates, Treasuries, agencies and mortgages, increased for both short-term, to $1.37 billion from $1.15 billion, and excluding short-term, which rose to $3.7 billion for the week ended Wednesday from $3.54 billion in the previous week.

Inflows also were higher for high-grade funds, up to $3.66 billion from $3.51 billion in the previous week, and for ETFs, which rose to $1.41 billion from $1.18 billion in the week-ago period.

Overall fixed income inflows rose to $6.9 billion from $5.63 billion a week earlier, BofA credit strategist Yuri Seliger said in the note.

The Markit CDX North American Investment Grade 33 index closed Friday mostly unchanged at a spread of 47.9 basis points.

In the secondary market, the week’s few issues all traded tighter, sources reported.

Canadian Imperial Bank of Commerce’s $1.25 billion of floating-rate senior notes due March 17, 2023 priced Tuesday tightened 7 bps on the bid side.

Steel Dynamics, Inc.’s $1 billion of fixed-rate senior notes (Baa3/BBB-/BBB) sold in two tranches on Monday tighter than guidance continued to improve another 1 bp to 2 bps on Friday. The notes are trading more than 10 bps better than issuance, according to market sources.

Elsewhere, bank and financial paper was mixed, while bonds in the telecommunications sector mostly firmed over the session, a source said.

AT&T Inc.’s 4.35% notes due March 1, 2029 were flat on the day but trading almost 50 bps tighter than where the issue priced earlier in the year.

Verizon Communications Inc.’s 3.875% green senior notes due Feb. 8, 2029 firmed about 2 bps and are ending the year nearly 40 bps better than issuance.

Charter Communications, Inc.’s 4.8% senior secured notes due March 1, 2050 reopened last week improved about 7 bps over the session.

CIBC tightens

Canadian Imperial Bank of Commerce’s floating-rate senior notes due March 17, 2023 (A2/BBB+/AA-) tightened to SOFR plus 73 bps bid, 71 bps offered, a market source said Friday.

The bank sold $1.25 billion of the notes on Tuesday at par to yield SOFR plus 80 bps.

The notes priced on top of guidance of SOFR plus 80 bps.

Canadian Imperial Bank of Commerce is a diversified financial institution based in Toronto.

Steel Dynamics improves

Steel Dynamics’ 3.45% senior notes due April 15, 2030 (Baa3/BBB-/BBB) firmed about 2 bps on Friday to 103 bps bid, 100 bps offered, according to market sources.

Steel Dynamics sold $600 million of the notes on Monday at a Treasuries plus 165 bps spread. Price guidance was in the 175 bps spread area, plus or minus 5 bps.

Steel Dynamics is a Fort Wayne, Ind.-based steel producer and metals recycler.

AT&T steady

AT&T’s 4.35% notes due March 1, 2029 were unchanged on Friday in secondary trading at 122 bps bid, a market source said.

AT&T sold $3 billion of the bonds on Feb. 13 at a spread of Treasuries plus 170 bps.

The telecommunications company is based in Dallas.

Verizon notes firm

Verizon Communications’ 3.875% green senior notes due Feb. 8, 2029 headed out Friday about 2 bps tighter at 82 bps bid, according to a market source.

Verizon sold $1 billion of the notes (Baa1/BBB+/A-) on Feb. 5 at a spread of Treasuries plus 120 bps.

The telecommunications company is based in New York City.

Charter tightens

Charter Communications’ 4.8% senior secured notes due March 1, 2050 (Ba1/BBB-/BBB-) traded about 7 bps better on Friday at 226 bps bid, according to a market source.

Charter priced a $1.3 billion add-on to the issue on Dec. 2 at 101.964 to yield 4.677%, or a spread of Treasuries plus 240 bps via subsidiaries Charter Communications Operating, LLC and Charter Communications Operating Capital Corp.

Charter originally sold the notes in a $1.5 billion offering on Oct. 15 at 99.436 to yield 4.836% and a spread of Treasuries plus 260 bps. The total outstanding is now $2.8 billion.

The broadband communications company is based in Stamford, Conn.

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