High-grade primary quiets after Ameren deal; year-to-date outflows around $25 billion

By Cristal Cody

Tupelo, Miss., Dec. 22 – Following the surprise $700 million offering on Monday from electric and gas utility Ameren Corp., no other high-grade bond issuers were seen over the week, sources said.

The 5% senior notes due 2029 (Baa1/BBB) that Ameren priced at a spread of 110 basis points over Treasuries traded 1 bp tighter in the secondary market, a source said.

High-grade issuers priced more than $23 billion of corporate bonds in December and about $1.3 trillion year to date, sources report.

Investment-grade sovereign, supranational and agencies issuers also sold $3.5 billion of paper in December and $316 billion of notes over the year.

January corporate deal volume is forecast to ramp up to about $150 billion, according to market sources.

Inflows decline

Year-to-date net outflows for short-term corporate investment-grade debt funds/ETFs were totaling about $25 billion by December, according to Refinitiv Lipper U.S. Fund Flows.

In high-grade bond funds and ETFs, including corporates, agencies, mortgages and Treasuries, inflows dropped to $790 million over the past week ended Wednesday from a $4.52 billion inflow in the prior week, according to a BofA Securities Inc. note.

The “inflow was exclusively due to flows for HG ETFs,” BofA said.

ETFs had inflows of $900 million after posting heavy outflows of $5.79 billion in the prior week, while flows remained negative for high-grade funds with $11 million of outflows over the past week but down from $1.27 billion of outflows a week earlier.

Outflows from short-term high-grade jumped to $4.2 billion in the week ended Wednesday from $2.19 billion a week ago, BofA said.

Inflows to the space excluding short-term declined to $4.99 billion this past week from $6.71 billion in the previous week.

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