Morning Commentary: Municipality Finance prices; pipeline quiet; high-grade inflows ‘robust’

By Cristal Cody

Tupelo, Miss., Feb. 2 – Municipality Finance plc (Aa1/AA+) announced it priced $100 million of floating-rate notes due 2021 early Friday.

The three-month Libor yield rose 1 basis point on Friday to 1.78%, a source said.

Otherwise, investment-grade market activity was mostly quiet over the morning after deal volume picked up over the previous two sessions.

On Thursday, issuers including Comcast Corp., IBM Credit LLC, Canadian National Railway Co., Crane Co., ERP Operating LP, Enterprise Products Operating LLC and Export Development Canada priced bonds.

Elsewhere, inflows to U.S.-domiciled equity funds and ETFs totaled $16.94 billion for the week ended Wednesday, compared to the $14.90 billion inflow the prior week and the $15.10 billion average over the past three weeks, Yuri Seliger, an analyst with BofA Merrill Lynch, said in a note released on Friday.

“Inflows to bond funds and ETFs declined, on the other hand, to $4.4 [billion] from $5.71 [billion] on weaker flows for high yield, loans and munis,” Seliger said, citing data from EPFR Global and BofA Merrill Lynch Global Research. “Inflows to high grade remained robust at $4.82 [billion], up from $4.46 [billion] the week before.”

Inflows to short-term high grade declined to $69 million from $1.07 billion, while inflows outside of short term increased to $4.13 billion from $3.40 billion, according to the note.

“The increase in inflows was led by ETFs to $2.14 [billion] from $1.01 [billion] while inflows to funds declined to $2.68 [billion] from $3.45 [billion],” Seliger said.

Meanwhile, trading in the investment-grade secondary market totaled $19.30 billion on Thursday, compared to $24.25 billion on Wednesday, $24.15 billion on Tuesday and $18.50 billion on Monday, according to Trace.

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