W.W. Grainger prices; strong volume forecast; Citrix, Otis notes firm; Omnicom, Amgen ease

By Cristal Cody

Tupelo, Miss., Feb. 21 – W.W. Grainger, Inc. tapped the high-grade primary market on Friday, capping off a week that posted more than $32 billion of bond issuance.

The company priced $500 million of five-year senior notes 5 basis points tighter than initial talk.

Looking ahead to next week, syndicate sources expect about $25 billion to $30 billion of new supply with a number of issuers holding fixed income investor calls for potential bond offerings.

Meanwhile, inflows to U.S. funds and ETFs moderated for the past week ended Wednesday following two weeks of heavy inflows, according to a BoA Securities, Inc. research note released Friday.

Fund and ETF investors bought $9.35 billion of bonds, down from $13.91 billion in the prior week and $11.7 billion during the week of Feb. 5, credit strategist Yuri Seliger said.

Flows were weaker for high-grade, high yield, loans and municipal bonds.

High-grade inflows, including corporates, agencies, Treasuries and mortgages, declined to $6.33 billion from $7.27 billion in the prior week, according to the report.

Short-term high-grade inflows were flat at $2.69 billion on the week, while inflows excluding short-term declined to $3.64 billion from $4.59 billion.

High-grade funds inflows rose to $4.27 billion from $3.72 billion in the previous week.

ETF inflows fell to $2.06 billion from $3.55 billion a week earlier.

Elsewhere, high-grade issues were mixed in the secondary market on Friday.

Citrix Systems, Inc.’s 3.3% split-rated senior notes due March 1, 2030 priced on Thursday tightened 5 bps on the bid side.

Otis Worldwide Corp.’s $5.3 billion of senior notes (Baa2/BBB/) brought to the market in six tranches on Wednesday traded about 1 bp to 4 bps tighter on the fixed-rate tranches and about 8 bps tighter on the floating-rate notes.

Omnicom Group Inc.’s 2.45% senior notes due April 30, 2030 that came mid-week softened more than 5 bps on the bid side.

Amgen Inc.’s $5 billion of senior notes (Baa1/A-/) priced in five tranches on Tuesday traded flat to about 7 bps wider than issuance.

In other secondary trading, energy bonds were mostly weaker.

Western Midstream Operating, LP’s 4.05% notes due Feb. 1, 2030 widened about 7 bps over the session.

Energy Transfer Operating LP 3.75% notes due May 15, 2030 headed out about 8 bps weaker.

The Markit CDX North American Investment Grade 33 index eased more than 1 bp on Friday to close at a spread of 46.88 bps.

W.W. Grainger prints

W.W. Grainger priced $500 million of 1.85% five-year senior notes at 99.722 to yield 1.909% and a spread of Treasuries plus 60 bps on Friday, according to a market source and an FWP filing with the Securities and Exchange Commission.

Initial price talk on the notes due Feb. 15, 2025 (A3/A+/) was in the Treasuries plus 65 bps area.

BofA Securities, Inc., J.P. Morgan Securities LLC, Citigroup Global Markets Inc., U.S. Bancorp Investments Inc. and Wells Fargo Securities LLC were the bookrunners.

The industrial supply company is based in Lake Forest, Ill.

Citrix tightens

Citrix Systems’ 3.3% split-rated senior notes due March 1, 2030 (Ba1/BBB/BBB) tightened to 180 bps bid, 175 bps offered in the secondary market, a source said.

Citrix sold $750 million of the notes on Thursday at 99.35 to yield 3.377% and a spread of Treasuries plus 185 bps.

The notes were initially talked to price with a spread in the Treasuries plus 185 bps area.

The real estate investment trust for housing and health care properties is based in Chicago.

Otis improves

Otis’ $500 million tranche of floating-rate notes due April 5, 2023 tightened to Libor plus 37 bps bid, Libor plus 34 bps bid offered in secondary trading, a source said.

The notes priced Wednesday at Libor plus 45 bps.

Initial price talk was at the Libor plus 65 bps area.

The company’s 2.565% notes due Feb. 15, 2030 improved about 3 bps in secondary trading to 98 bps bid, 95 bps offered.

Otis sold $1.5 billion of the 10-year notes at a spread of 100 bps over Treasuries, compared to talk in the Treasuries plus 115 bps area.

The elevator and escalator maker is based in Farmington, Conn.

Omnicom eases

Omnicom’s 2.45% senior notes due April 30, 2030 (Baa1/BBB+) traded on Friday at 98 bps bid, 95 bps offered, a market source said.

The company priced an upsized $600 million of the 10-year notes on Wednesday at 99.656 to yield 2.488% and a spread of Treasuries plus 92 bps.

Initial price guidance on the notes was in the Treasuries plus 110 bps to 115 bps area.

The deal was upsized from $500 million.

The global marketing and corporate communications company is based in New York.

Amgen mostly softens

Amgen’s 2.45% notes due Feb. 21, 2030 were quoted Friday in the secondary market at 94 bps bid, 91 bps offered, a source said.

The company sold $1.25 billion of the 10-year notes on Tuesday at 99.965 to yield 2.454%, or a 90 bps over Treasuries spread.

The 10-year notes were talked to print with a spread in the Treasuries plus 105 bps to 110 bps area.

Amgen is a Thousand Oaks, Calif., manufacturer and marketer of human therapeutics based upon advances in cellular and molecular biology.

Western Midstream eases

Western Midstream Operating’s 4.05% notes due Feb. 1, 2030 (Ba1/BBB-/BBB-) eased about 7 bps on Friday to the 233 bps bid area, a market source said.

The company sold $1.2 billion of the bonds on Jan. 9 at a spread of 220 bps over Treasuries.

The Woodlands, Texas-based company owns, develops and operates midstream energy assets.

Energy Transfer softens

Energy Transfer Operating’s 3.75% notes due May 15, 2030 (Baa3/BBB-/BBB-) softened about 8 bps during the session to the 185 bps bid area, according to a market source.

The company sold $1.5 billion of the long 10-year notes on Jan. 7 at a Treasuries plus 255 bps spread.

Energy Transfer is a natural gas midstream and intrastate transportation and storage company based in Dallas.

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