Morning Commentary: High-grade supply quiets; Takeda continues marketing; flows rebound

By Cristal Cody

Tupelo, Miss., June 26 – Investment-grade bond market action quieted early Friday, capping off a week of about $23 billion of new issuance.

Deal volume is expected to thin to about $10 billion to $15 billion over the upcoming short market week ahead of the Independence Day holiday break, sources report.

Meanwhile, Takeda Pharmaceutical Co., Ltd. (Baa2/BBB+) continues marketing on Friday for four tranches of registered dollar-denominated senior notes and additional tranches of euro-denominated bonds. Marketing began on Thursday for the notes that includes dollar-denominated 10-, 20-, 30- and 40-year tranches with pricing anticipated in the week ahead.

Equitable Holdings, Inc. subsidiary Equitable Financial Life Insurance Co. (A2/A+) also remains in the deal pipeline after the company held fixed income investor calls on Wednesday for an inaugural offering of notes.

Elsewhere, investment-grade bond fund and ETF inflows posted the second highest total on record for the past week ended Wednesday, according to a BofA Securities, Inc. research note released on Friday.

Flows rebounded to $12.83 billion from $5.98 billion a week earlier.

“The improvement in IG inflows was broad-based,” the analysts said.

ETF inflows rose to $6.6 billion from $3.8 billion in the previous week, and fund inflows climbed to $6.23 billion from $2.81 billion a week earlier.

Short-term inflows increased to $5.28 billion this past week from $1.58 billion, while excluding short-term inflows rose to $7.56 billion from $4.4 billion in the previous week.

In the secondary market, new issues priced this week were improving, sources note.

Intuit Inc.’s $2 billion four-part offering of fixed-rate notes (A3/A-) that priced on Thursday with an overall final book demand of more than $10 billion and 40 basis points tighter than initial talk firmed about 4 bps to 5 bps.

The company’s tranche of 1.65% notes due July 15, 2030 traded at 96 bps bid.

Intuit sold $500 million of the 10-year notes at a spread of 100 bps over Treasuries.

Initial talk was at the 140 bps spread area.

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