NextEra offers bonds; Swiss Re eyes deal; short-term inflows drop; Valero firms; Target eases

By Cristal Cody

Tupelo, Miss., March 22 – High-grade primary market action slowed on Friday with one deal marketed from NextEra Energy Capital Holdings Inc.

Investment-grade corporate issuers priced more than $18 billion of bonds over the week, compared to market forecasts of about $20 billion to $25 billion of issuance.

About $20 billion of bond supply is predicted for the week ahead, according to syndicate sources.

Coming up, Swiss Re Finance (Luxembourg) SA plans to hold a roadshow and fixed income investor calls for a dollar-denominated offering of 30-year notes.

The Markit CDX North American Investment Grade 32 index softened about 3 basis points on Friday to end at a spread of 67 bps.

Inflows for the overall high-grade space, including corporate bonds, Treasuries, agencies and mortgages, moderated to $3.78 billion for the week ended March 20 from $5.1 billion in the previous week, according to a BofA Merrill Lynch research note released on Friday.

“The decline was completely due to short-term high grade,” BofA Merrill Lynch credit strategist Yuri Seliger said in the note.

Short-term high-grade inflows fell to $840 million from $2.36 billion in the prior week.

Meanwhile, excluding short-term net buying rose to $2.94 billion for the past week from $2.47 billion a week earlier.

Inflows to high-grade funds declined to $2.16 billion for the week ended Wednesday from $2.58 billion in the prior week, according to the report.

New issues were mixed in secondary trading on Friday.

Valero Energy Corp.’s $1 billion of 4% senior notes due April 1, 2029 headed out about 1 bp better on the bid side.

Target Corp.’s $1 billion of 3.375% notes due April 15, 2029 priced on Monday traded 2 bps softer than issuance.

NextEra Energy offers bonds

NextEra Energy Capital Holdings marketed floating-rate debentures due Sept. 28, 2020 on Friday, according to a 424B5 filing with the Securities and Exchange Commission.

RBC Capital Markets LLC is the bookrunner.

The notes are guaranteed by NextEra Energy, Inc.

NextEra Energy Capital is a subsidiary of the Juno Beach, Fla.-based energy company.

Swiss Re Finance plans roadshow

Swiss Re Finance (Luxembourg) (Aa3/A+/) plans to hold a roadshow and fixed income investor calls on Monday and Tuesday for a dollar-denominated Rule 144A and Regulation S offering of 30-year notes, according to a market source.

The roadshow will be held in the United States and London.

BofA Merrill Lynch, Barclays, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are the arrangers.

Swiss Re Finance is a Luxembourg-based financing arm of reinsurance company Swiss Re Ltd.

Valero firms

In secondary trading, Valero Energy’s 4% notes due April 1, 2029 (Baa2/BBB/BBB) were quoted at 154 bps bid, 151 bps offered on Friday afternoon, according to a market source.

The notes priced on Thursday in a $1 billion offering at a spread of 155 bps over Treasuries.

The oil refinery owner is based in San Antonio.

Target notes ease

Target’s 3.375% notes due April 15, 2029 traded softer than issuance on Friday at 80 bps bid, 77 bps offered, a source said.

The retailer sold $1 billion of the 10-year notes (A2/A/A-) on Monday at a spread of 78 bps over Treasuries.

The discount merchandise chain is based in Minneapolis.

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