Oneok sells $1.25 billion; primary thin; Finnvera to offer notes; market eyes Walmart

By Cristal Cody

Tupelo, Miss., June 19 – Market volatility over trade war fears kept high-grade deal action thin over Tuesday’s session and credit spreads widened.

Oneok Inc. sold $1.25 billion of guaranteed fixed-rate senior notes in two tranches as the sole reported issuer.

While Oneok priced, several issuers stood down during the session and postponed bond deals, a source said.

The Markit CDX North American Investment Grade 30 index softened about 2 basis points to close at a spread of 63 bps.

Coming up on Wednesday, Finnvera plc plans to bring a benchmark-sized offering of five-year notes to the primary market.

In the meantime, a Walmart Inc. deal is expected in the immediate horizon, a source said. The company could price as much as $10 billion of bonds to finance its approximate $16 billion acquisition of India e-commerce company Flipkart Online Services pvt, according to the market source.

Walmart held fixed-income investor calls on Monday. Barclays, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the arrangers.

Monday’s session included Bayer AG’s $15 billion eight-part issuance of senior notes and Duke Energy Florida, LLC’s $1 billion two-tranche sale of first mortgage bonds.

About $35 billion to as much as $50 billion of volume is forecast for the mid-June week, which typically has light volume, according to market sources.

Elsewhere, final fund flows to U.S.-domiciled high-grade funds and ETFs for May declined to $8.9 billion from $12.2 billion in April, Yuri Seliger, an analyst with BofA Merrill Lynch, said in a note released Tuesday.

“This makes May’s inflow the lowest inflow since December 2016,” Seliger said. “This subdued pace of inflows is consistent with our expectations.”

Inflows to short-term high grade rose to $6.4 billion in May from $3.4 billion in April, while outside-of-short-term inflows dropped to $2.5 billion from $8.8 billion in April, according to the note. Total return funds and ETFs had a $2 billion outflow in May, compared to a $200 million outflow in April and a $2.6 billion inflow in March.

“So far in June the average pace of inflows has been similar to that in May,” Seliger said.

Oneok prices $1.25 billion

Oneok sold $1.25 billion of guaranteed fixed-rate senior notes (Baa3/BBB/) in two tranches on Tuesday, according to a market source and an FWP filing with the Securities and Exchange Commission.

The company priced $800 million of 4.55% 10-year notes at 99.727 to yield 4.584% and a spread of Treasuries plus 170 bps. The notes were talked to print in the Treasuries plus 180 bps spread area.

The $450 million tranche of 5.20% 30-year notes priced at 99.546 to yield 5.23%, or a Treasuries plus 220 bps spread. Price guidance on the 30-year notes was in the Treasuries plus 225 bps area.

Citigroup Global Markets, BofA Merrill Lynch, Mizuho Securities USA Inc., Wells Fargo Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities, Morgan Stanley & Co. LLC, MUFG and TD Securities (USA) LLC were the lead managers.

The notes are guaranteed by Oneok Partners LP and Oneok Partners Intermediate LP.

Oneok is a midstream service provider and natural gas company based in Tulsa, Okla.

Finnvera to price notes

Finnvera plc (Aa1/AA+/) is marketing a benchmark-sized offering of notes due June 27, 2023 to price on Wednesday at a spread of mid-swaps plus 17 bps, according to an informed source.

Citigroup Global Markets, Goldman Sachs, HSBC Securities (USA) Inc and TD Securities are the bookrunners for the Rule 144A and Regulation S transaction.

Finnvera is a government-owned financing company based in Kuopio, Finland.

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