Morning Commentary: Investment-grade primary active, BlackRock TCP Capital notes on tap

By Cristal Cody

Tupelo, Miss., Aug. 16 – BlackRock TCP Capital Corp. is marketing $150 million of five-year registered senior notes in the high-grade primary market on Friday.

Initial price talk was in the Treasuries plus 287.5 basis points area.

The deal is expected to price on Friday and settle on Aug. 23.

Investment-grade issuers have sold about $23 billion of bonds week to date, compared to about $25 billion to $30 billion of volume expected by market sources for the week.

Issuance is expected to be slow in the back half of August ahead of the Labor Day holiday.

The high-grade space saw the biggest inflows in the fixed income space this past week, Yuri Seliger, a credit strategist with BofA, said in a research note released on Friday.

High-grade, including corporate bonds, agencies, Treasuries and mortgages, had $4.17 billion of inflows for the week ended Wednesday, up from $1.86 billion of inflows in the previous week.

Short-term high-grade inflows declined to $1.45 billion from $1.7 billion last week, while excluding short-term inflows jumped to $2.72 billion from $160 million in the prior week.

The decline to inflows to high-grade funds to $2.89 billion from $3.29 billion last week was offset by ETF flows “turning positive” with a $1.29 billion inflow following a $1.43 billion outflow in the previous week, Seliger said.

Meanwhile, in the secondary market, Gaming & Leisure Properties, Inc.’s $1.1 billion of senior notes (Ba1/BBB-/BBB-) that priced in two tranches on Thursday through subsidiaries GLP Capital, LP and GLP Financing II, Inc. were mixed, a source said.

The company’s $400 million of 3.35% notes due Sept. 1, 2024 firmed about 3 bps in the secondary market. The notes priced at a spread of 195 bps over Treasuries.

Secondary trading volume was light on Thursday with $16.93 billion of high-grade issues traded, compared to $17.6 billion on Wednesday, $19.08 billion on Tuesday and $15.28 billion on Monday, according to Trace data.

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