Investment-grade supply beats expectations; Thermo Fisher tightens; Target flat; Citi eases

By Aleesia Forni and Cristal Cody

New York, April 8 – John Deere Capital Corp. sold a $250 million add-on to its seven-year bonds to close out the week on Friday.

More than $39 billion of new high-grade issuance entered the week’s primary ahead of what will be the beginning of earnings blackout periods.

Despite broader market volatility, the figure topped what was predicted to be around a $30 billion week.

Around $15 billion of supply is expected to enter the market during the week ahead, with most of that supply coming at the week’s front end.

As was the case during the week just ended, the bulk of that total will likely come from the financial sector.

Meantime, Lipper US Funds Flows reported inflows into investment-grade corporate bond funds for the week ended April 6.

The $1.02 billion of inflows into the asset class for the week pushes the year-to-date total to $500 million of inflows and follows the $211 million of inflows reported the prior week.

Canadian primary action slowed over the week with just two deals priced.

“Credit markets like the IG 26 were weakening, and other risk markets were sort of backing off this week,” a source said.

The Markit CDX North American Investment Grade index closed mostly unchanged on Friday at a spread of 82 basis points.

In the secondary bond market, Thermo Fisher Scientific Inc.’s 3% senior notes due 2023 tightened about 6 bps over the day.

Target Corp.’s 2.5% senior notes due 2026 were flat from where the notes priced at the start of the week.

John Deere does add-on

John Deere Capital sold a $250 million add-on to its 2.8% senior medium-term notes (A2/A), series F, due March 6, 2023 on Friday at Treasuries plus 100 bps, according to an FWP filed with the Securities and Exchange Commission.

Pricing was at 102.086 to yield 2.469%.

The bookrunners were Goldman Sachs & Co. and HSBC Securities (USA) Inc.

The funding arm of agriculture and industrial equipment maker Deere & Co. is based in Moline, Ill.

Thermo Fisher stronger

Thermo Fisher Scientific’s 3% notes due 2023 (Baa3/BBB/BBB) traded about 6 bps better on Friday at 122 bps bid, a market source said.

Thermo Fisher Scientific sold
$1 billion of the notes on Monday at a spread of 155 bps over Treasuries.

The science technology company is based in Waltham, Mass.

Target steady

Target’s 2.5% notes due 2026 headed out unchanged from issuance at 72 bps bid on Friday, a market source said.

Target sold $1 billion of the notes (A2/A/A-) on Monday at Treasuries plus 72 bps.

The discount merchandise chain is based in Minneapolis.

Bank of America firms

Bank of America Corp.’s 4.45% subordinated notes due 2026 firmed 2 bps to 236 bps bid, a source said.

Bank of America sold $2 billion of the notes on Feb. 29 at a spread of 270 bps plus Treasuries.

The financial services company is based in Charlotte, N.C.

JPMorgan eases

JPMorgan Chase & Co.’s 3.3% senior notes due 2026 traded softer at 150 bps bid on Friday, compared to 143 bps bid in the previous session, according to a market source.

JPMorgan sold $2.5 billion of the notes (A3/A-) on March 18 at a spread of 145 bps over Treasuries.

The financial services company is based in New York City.

Citigroup widens

Citigroup Inc.’s 4.6% subordinated notes due 2026 widened about 7 bps to 262 bps bid during the session, a market source said.

Citigroup sold $1.5 billion of the notes (Baa3/BBB/A-) on March 1 at a spread of Treasuries plus 280 bps.

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

Berkshire Hathaway stable

Berkshire Hathaway Inc.’s 3.125% senior notes due 2026 were unchanged on the day at 108 bps bid, a market source said.

The company sold $2.5 billion of the notes (Aa2) on March 7 at 130 bps over Treasuries.

Berkshire Hathaway is an Omaha-based holding company for subsidiaries.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.