High-grade bond issuance jumps; Amgen among record deals; busy week ahead anticipated

By Cristal Cody

Tupelo, Miss., Feb. 17 – High-grade issuers pumped the market with $54 billion of new bonds over the week, led by one of the largest deals in investment-grade history.

Amgen Inc. sold $24 billion of senior notes (Baa1/BBB+/BBB+) in eight tranches on Wednesday in the largest offering priced since Magallanes, Inc. printed $30 billion of notes in 11 tranches on March 9, 2022 and the ninth-largest investment-grade deal ever recorded, a source said.

The deal had a whopping cumulative order book of $88.6 billion and priced 25 basis points to 30 bps tighter than talk.

Amgen’s notes were trading about 1 bp to 7 bps tighter in the secondary market on Friday, a source said.

The company’s longest-date tranche of 5.75% notes due 2063 improved to 193 bps bid. The $2.75 billion tranche priced at a spread of 230 bps over Treasuries.

The week’s deal supply was expected to be strong but blew past forecasts of about $30 billion.

Amgen priced its transaction the day after the release of widely anticipated January Consumer Price Index data on Tuesday.

February has seen a host of heavy-hitters in the primary market, including Intel Corp.’s $11 billion seven-tranche offering of notes (A2/A/A-) that priced in the prior week.

Though the week ahead is a holiday-shortened week, issuance is expected to stay strong and at full speed on Tuesday.

High-grade issuers are targeted to bring about $25 billion of new paper, sources said.

IG inflows decline

In other market action, investment-grade inflows continued to recede this week.

Inflows into corporate investment-grade funds fell to $1.19 billion over the past week ended Wednesday from $2.84 billion in the prior week, according to Refinitiv Lipper US Fund Flows.

Flows to corporate investment-grade funds and ETFs also dropped to $1.25 billion over the past week ended Wednesday from $2.11 billion in the previous week and $4.21 billion a week earlier, according to a BofA Securities Inc. research note.

The exception was high-grade funds inflows, which improved to $1.94 billion over the past week from $920 million in the previous week.

High-grade ETF inflows were negative with $690 million of outflows reported following a $1.19 billion inflow the previous week, BofA said.

© 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.