High-grade market action quiets; busy week forecast on deal backlog; new bonds mixed

By Cristal Cody

Tupelo, Miss., March 29 – Investment-grade issuers stayed to the sidelines during the short session on Thursday following more than $14 billion of volume in the first three days of the week.

A backlog of deals in the pipeline is expected to keep issuance active in the week ahead with syndicate sources forecasting about $20 billion to $25 billion of supply.

About $80 billion to $90 billion of supply is forecast for April, down from more than $124 billion of volume in March, Yunyi Zhang, an analyst with BofA Merrill Lynch, said in a note released on Thursday.

New issues priced over the week were mixed in the secondary market on Thursday.

Mylan Inc.’s $1.5 billion of senior notes (Baa3/BBB-/BBB-) priced in two tranches during the previous session tightened about 1 basis point.

CRH America Finance, Inc.’s $1.5 billion of senior notes (Baa1/BBB+/) brought to the market in two tranches on Tuesday softened about 2 bps.

Dollar General Corp.’s $500 million of 4.125% senior notes due May 1, 2028 sold on Monday tightened about 2 bps.

Elsewhere, over the last four business days, “outflows from high grade, high yield and global EM bonds were partially offset by an inflow to leveraged loans,” Yuri Seliger, an analyst with BofA Merrill Lynch, said in the note.

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