Morning Commentary: Harris offers floating-rate notes; investment-grade inflows turn positive

By Cristal Cody

Tupelo, Miss., Feb. 23 – Harris Corp. announced details early Friday for a $300 million offering of floating-rate notes due February 2019 via bookrunner Citigroup Global Markets Inc.

Otherwise, activity was light over the morning following two strong consecutive sessions of supply.

The three-month Libor climbed 2 basis points to 1.92% on Friday, a source said.

Credit spreads widened on Thursday. The Markit CDX North American Investment Grade 29 index closed the previous day about 2 bps softer at a spread of 58 bps.

Secondary trading volume rose to $20.13 billion on Thursday, up from $19.42 billion on Wednesday and $16.55 billion on Tuesday, according to Trace.

This week saw the “return of inflows,” Yuri Seliger, an analyst with BofA Merrill Lynch, said in a research note released on Friday.

U.S. fund and ETF flows turned positive for both stocks and bonds for the week ended Feb. 21 following outflows a week earlier, according to the note.

High grade had an inflow of $2.71 billion after a $1.52 billion outflow, Seliger said, citing data from EPFR Global and BofA Merrill Lynch Global Research.

Flows were stronger for both short-term high grade to $60 billion from $120 million and outside of short-term to $2.11 billion from minus $1.65 billion, according to the note. High-grade funds reported inflows of $1.81 billion.

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