Equifax upsizes; Western Union, S&P Global hold investor calls; AbbVie mixed; Edison firms

By Cristal Cody

Tupelo, Miss., Nov. 15 – Equifax Inc. priced an upsized $750 million of five-year senior notes on Friday on the tight side of guidance.

The deal brings week to date investment-grade volume to about $49 billion, in line with the $45 billion to $50 billion of supply forecast for the short market week.

Volume was boosted by AbbVie Inc.’s $30 billion 10-tranche offering of bonds priced on Tuesday in the fourth largest high-grade bond deal on record, according to market sources.

Supply is expected to stay strong ahead of the Thanksgiving Day holiday with several companies holding fixed income investor calls with potential issuance to follow, according to market sources.

On Friday, Western Union Corp. (Baa2/BBB/BBB+) concluded a three-day round of investor calls and meetings, a source said.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Wells Fargo Securities LLC are the arrangers.

Coming up on Monday, credit ratings firm S&P Global Inc. (Baa1//BBB+) will hold fixed income investor calls, a source said. The arrangers are BofA Securities, Inc., Citigroup, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC.

About $25 billion of issuance is forecast for the week ahead, according to syndicate sources.

The Markit CDX North American Investment Grade 33 index closed Friday 1 basis point tighter at a spread of 51.4 bps.

In the secondary market, AbbVie’s $30 billion of bonds (Baa2/A-/) were mixed but remain mostly better than issuance, a source said.

The company’s $5.5 billion of 3.2% notes due Nov. 21, 2029 were quoted 3 bps tighter in secondary trading.

The notes priced at a Treasuries plus 130 bps spread.

Edison International’s $800 million of senior notes (Baa3/BBB-/BBB-) priced in two tranches on Thursday tightened about 6 bps to 7 bps, according to a market source.

The company’s $500 million of 3.55% notes due Nov. 15, 2024 firmed 6 bps. The notes priced at a Treasuries plus 195 bps spread.

Inflows soften

Looking at bond buying in the high-grade space, including corporate bonds, agencies, Treasuries and mortgages, the past week ended Wednesday saw weaker inflows.

“Within fixed income, flows were weaker for both high grade and high yield, partially offset by a smaller outflow from government bonds,” Yuri Seliger, a credit strategist with BofA Securities, Inc., said in a research note released Friday.

High-grade inflows slowed to $2.42 billion from $3.71 billion in the previous week, led by short-term funds and ETFs, according to the note.

Inflows to the short-term high-grade space dropped to $870 million from $2.11 billion a week ago, while excluding short-term inflows declined to $1.55 billion from $1.6 billion.

Inflows fells to $2.2 billion this week from $3.07 billion in the prior week for high-grade funds.

Investment-grade ETFs inflows softened to $230 million from $640 million, the note said.

Overall inflows to U.S. bond funds and ETFs was down for a third consecutive week at $2.47 billion from a $4.22 billion inflow in the previous week.

“This past week's inflow was the lowest since the week of Sept. 18,” Seliger said. “Flows typically follow returns, and a slowdown in bond buying would be consistent with the increase in interest rates since early October.”

In contrast, stock purchases have remained steady with a $5.62 billion inflow this week, up slightly from a $5.36 billion inflow in the prior week, according to the report.

Equifax prices

In the new offering, Equifax priced $750 million of 2.6% five-year notes (Baa1/BBB/) at a spread of 100 bps over Treasuries, according to a market source and an FWP filing with the Securities and Exchange Commission.

Initial talk was in the Treasuries plus 120 bps area.

The deal was upsized from $500 million.

BofA Securities, J.P. Morgan, Mizuho Securities USA Inc., SunTrust Robinson Humphrey Inc. and Wells Fargo were the bookrunners.

The information technology provider is based in Atlanta.

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