Morning Commentary: Customers Bancorp, Allegiance, BGC, Cnooc, British Columbia on tap

By Cristal Cody

Tupelo, Miss., Sept. 20 – Several corporate and sovereign, supranational and agency deals are expected to price in the high-grade primary market on Friday.

Customers Bancorp Inc. is marketing five-year senior notes.

Allegiance Bancshares, Inc. is offering 10-year fixed-to-floating rate subordinated notes.

BGC Partners, Inc. plans to price a private offering of senior notes.

Cnooc Finance (2013) Ltd. intends to price registered dollar-denominated guaranteed notes.

The Province of British Columbia expects to price a dollar-denominated offering of five-year global notes on Friday. Initial price talk is in the mid-swaps plus 23 basis points area.

The European Bank for Reconstruction and Development also plans to bring $500 million of five-year green climate resilience bonds to the primary market on Friday.

The notes were initially talked to price in the mid-swaps plus 16 bps area.

Looking ahead to next week, Thermo Fisher Scientific Inc. expects to start marketing a dual-currency offering of senior notes with fixed income investor calls.

The company plans to price dollar- and euro-denominated notes.

Week to date, corporate high-grade supply totals more than $18 billion. Market sources expected about $25 million of deal volume this week.

Lipper US Fund Flows reported corporate investment-grade funds had inflows of $2.83 billion for the week ended Wednesday.

In the broader high-grade market including corporate bonds, mortgages, agencies and Treasuries, investment-grade inflows declined to $2.53 billion this week from a $6.94 billion inflow in the prior week, according to a BofA Merrill Lynch note released on Friday.

Short-term high-grade reported a $570 million outflow for the week ended Wednesday following a $2.77 billion inflow a week earlier.

“The short-term high-grade outflow was likely a result of corporate tax payments, which contributed to the disruptions in the repo markets earlier this week,” the note said.

Excluding short-term inflows “remained robust” for the past week at $3.1 billion, down from $4.17 billion in the previous week, according to the report.

High-grade inflows declined for funds to $1.13 billion from $3.25 billion in the previous week and for ETFs, which fell to $1.41 billion this past week from $3.68 billion a week earlier.

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