Morning Commentary: High-grade funds, ETFs set inflow record; Goldman Sachs BDC firms

By Cristal Cody

Tupelo, Miss., Feb. 7 – The high-grade primary market stayed quiet at the start of Friday’s session following more than $21 billion of corporate supply and more than $11 billion of sovereign, supranational and agency issuance this week.

Meanwhile, investment-grade bond funds and ETFs set a record high for inflows over the past week ended Wednesday at $9.32 billion, according to a BofA Securities, Inc. global research note released Friday.

“Highlighting the heavy flows so far this year, the previous record high of $8.92 [billion] was from the first week of January,” credit strategist Yuri Seliger said.

Short-term high-grade inflows climbed to $2.73 billion from $1.22 billion in the week ago period, while excluding short-term flows increased to $6.58 billion from $5.61 billion.

The bulk of the increase was seen in the rise of flows in ETFs to $3.6 billion from $1.4 billion a week ago, Seliger said.

Fund inflows rose slightly to $5.71 billion for the past week from $5.42 billion a week earlier.

Elsewhere in the secondary market, new issues were mostly tighter, a source said.

Goldman Sachs BDC, Inc.’s upsized $360 million of 3.75% senior notes due Feb. 10, 2025 (Baa3//BBB-) tightened more than 10 basis points in secondary trading.

The notes priced Thursday in a deal upsized from $300 million at 99.91 to yield 3.77% and a spread of 230 bps over Treasuries.

Initial price talk was in the Treasuries plus 240 bps area.

New York-based Goldman Sachs BDC was formed by Goldman Sachs Group Inc. as a specialty finance business development company that invests in middle-market companies.

Overall high-grade secondary market volume totaled $23.45 billion on Thursday, compared to $24.22 billion on Wednesday, $25.3 billion on Tuesday and $18.61 billion on Monday, according to Trace data.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.