Morning Commentary: A.P. Moller-Maersk starts roadshow; overall high-grade inflows rise

By Cristal Cody

Tupelo, Miss., May 31 – A.P. Moller-Maersk A/S (Baa3/BBB) will kick off a roadshow in London and New York on Friday for a dollar-denominated Rule 144A and Regulation S offering of notes.

The fixed income investor meetings for the Copenhagen, Denmark, container shipping company will continue through Tuesday, according to a market source.

Barclays, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC and SMBC Nikko Securities America, Inc. are the bookrunners.

Otherwise, the primary market was quiet over the morning with no registered issuers.

Market tone was risk-off following the government’s surprise announcement of tariffs on Mexico goods, a source said.

Supply is ending the week below syndicate forecasts with nearly $6 billion of notes priced over the holiday-shortened market week.

About $10 billion to $15 billion of deal volume was expected this week, according to syndicate sources.

Investment-grade corporate secondary market volume this week included $19.37 billion of bonds traded on Thursday, $23.98 billion on Wednesday and $17.75 billion on Tuesday, according to Trace data.

The U.S. markets were closed on Monday for the Memorial Day holiday.

Meanwhile, high-grade outflows for this past week are the biggest since 2015, a market source said.

Lipper US Fund Flows on Thursday reported outflows for corporate investment-grade funds jumped to $5.1 billion for the week ended May 29 from $756 million of outflows in the previous week.

However, inflows in the overall high-grade space, which includes corporates, mortgages, Treasuries and agencies, improved for the week ended Wednesday, according to a BofA Securities research report released on Friday that cited data from EPFR Global.

Inflows improved to $2.67 billion from a low $310 million print in the prior week, “a level similar to the average pace so far this year,” Yuri Seliger, a credit strategist at BofA Securities, said in the note.

The short-term high-grade space saw a $430 million inflow this week from a $220 million outflow in the prior week.

Excluding short-term securities, inflows climbed to $2.24 billion from $540 million a week ago.

In addition, inflows rose for funds to $1.66 billion from $80 million and for ETFs to $1.01 billion from $230 million in the previous week, the report said.

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