Morning Commentary: Ford Credit brings benchmark three-part deal; ETF inflows continue

By Paul A. Harris

Portland, Ore., June 5 – Ford Motor Credit Co. LLC came with a benchmark three-part offering of notes in bullet tranches (Ba2/BB+/BB+) set for a quick-to-market Monday execution.

The offering includes two tranches of fixed-rate notes: three-year notes with initial price talk in the 7 1/8% area and seven-year notes with initial talk in the 7 3/8% area. There is also a tranche of three-year floating-rate notes.

Away from the new issue calendar, the broad high-yield bond market was slightly weaker at mid-morning after opening the session 1/8 of a point better, sources said.

With the major U.S. stock indexes mixed at mid-morning, the iShares iBoxx $ High Yield Corporate Bd (HYG) was down a dime, or 0.13%, at $74.48.

The Solenis (Olympus Water US Holding Corp.) 9¾% senior secured notes due November 2028 (B3/B-) were a touch lower on Monday morning, changing hands at 99 5/8, a bond trader said.

The $1.7 billion tranche priced at par on May 24.

Fund flows

The dedicated high-yield bond funds saw $914 million of net daily cash inflows on Friday, according to a market source.

High-yield ETFs saw $864 million of inflows on the day. Those follow $897 million of inflows on Thursday and $334 million of inflows last Wednesday.

Actively managed high-yield funds saw $50 million of inflows on Friday.

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