Boeing, Philip Morris, Black & Decker, Baxter price; supply strong; high-grade flows slow

By Cristal Cody

Tupelo, Miss., Oct. 29 – Investment-grade supply picked up on Thursday with nearly $8 billion of bonds priced, pushing week-to-date volume past forecasts.

Boeing Co. tapped the primary market with $4.9 billion of senior notes (Baa2/BBB-/BBB-) in four tranches.

The company’s offering included $1 billion of long three-year notes, $1.4 billion of long five-year notes, $1.1 billion of long seven-year notes and $1.4 billion of long 10-year notes.

Philip Morris International Inc. came by with a $1.5 billion two-tranche offering of notes (A2/A/A) during the session.

The company sold $750 million of long five-year notes and $750 million of 10-year notes.

Stanley Black & Decker, Inc. priced $750 million of 30-year notes (Baa1/A/A-) during the session.

Also, Baxter International Inc. sold $650 million of long 10-year senior notes (Baa1/A-/A-) in a Rule 144A and Regulation S offering.

More than $18 billion of investment-grade issues have priced week to date with the bulk of issuance seen on Tuesday and Thursday.

Supply outpaced market forecasts that called for about $15 billion of deal volume this week.

Meanwhile, investment-grade corporate fund inflows slowed for the week ended Wednesday to $3.42 billion, according to Refinitive Lipper US Fund Flows.

Inflows totaled $6.76 billion in the previous week and $6.64 billion in the week prior.

Tractor Supply steady

Market tone was mixed over the day with equities recovering some after Wednesday’s sell-off that sent stock indices down more than 3% and credit spreads more than 4 basis points wider.

The Dow Jones industrial average closed up 0.52%, the S&P 500 gained 1.19% and the Nasdaq improved 1.64%.

Investment-grade credit spreads remained about 0.5 bp softer on Thursday after easing more than 4 bps in the prior session.

The Markit CDX North American Investment Grade 35 index finished at a spread of 64.42 bps.

The iShares iBoxx Investment Grade Corporate Bond ETF edged 0.26% lower on the day to $134.43.

The PIMCO Investment Grade Corporate Bond Index slipped 0.33% to $114.48.

New issues have traded flat to modestly better in the secondary market this week.

Tractor Supply Co.’s upsized $650 million of 1.75% notes due Nov. 1, 2030 (Baa1/BBB) that priced on Tuesday were wrapped around issuance, a source said.

The notes priced at 98.874 to yield 1.874%, or a spread of Treasuries plus 110 bps.

Price talk was in the Treasuries plus 145 bps area.

The deal was upsized from $500 million.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.