August deal slowdown forecast; Fifth Third Bank, Burlington Northern notes tighten

By Cristal Cody

Tupelo, Miss., July 27 – High-grade primary action remained quiet on Friday while syndicate sources expect a summer slowdown in the upcoming week and over August.

About $15 billion to $20 billion of volume is predicted for the week ahead and about $60 billion to $70 billion for August, according to syndicate sources on Friday.

Investment-grade issuers priced more than $20 billion of bonds over the week, on the low end of market forecasts of about $20 billion to $25 billion of supply.

Fifth Third Bank placed the largest corporate deal of the week with a $1.55 billion three-part offering of senior notes (A3/A-/A-) that came on Monday.

In the secondary market, new issues priced over the week traded mostly tighter on Friday.

Fifth Third Bank’s paper firmed 2 basis points to 6 bps.

Burlington Northern Santa Fe, LLC’s $750 million of senior debentures due Dec. 15, 2048 tightened nearly 10 bps.

Elsewhere, high-grade inflows declined over the week.

For the week ended July 25, Lipper US Fund Flows reported inflows of $1.99 billion for corporate investment-grade funds, down slightly from $2.02 billion of reported inflows in the previous week.

Flows to bonds weakened across most sectors, except junk, according to a BofA Merrill Lynch note released on Friday.

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