Primary quiet; Oaktree eyes deal; high-grade funds, ETFs set inflow record; Goldman BDC firms

By Cristal Cody

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

Market participants digested economic data that included a stronger-than-expected jobs report. The Labor Department announced 225,000 jobs were added in January, higher than the 165,000 forecast.

The unemployment rate was 3.6%, above forecasts of 3.5%.

Coming up on Monday, Oaktree Specialty Lending Corp. plans to hold fixed income investor calls with a possible transaction to follow ahead of its $75 million redemption of 5.875% $25-par senior notes due Oct. 30, 2024 on March 2.

Meanwhile, investment-grade bond funds and ETFs set a new 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.

The Markit CDX North American Investment Grade 33 index softened nearly 1 basis point over the day to close at a spread of 46.2 bps.

In the secondary market, Energy Transfer Operating LP’s 3.75% notes due May 15, 2030 traded heavily on Friday and remain better than issuance, sources report.

Western Midstream Operating, LP’s 4.05% notes due Feb. 1, 2030 softened on the day.

New bank and financial paper improved about 2 bps to 4 bps, 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 bps.

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.

Oaktree Specialty considers deal

Oaktree Specialty Lending (Baa3//BBB-) plans to hold fixed income investor calls on Monday and Tuesday, according to a 497AD filing with the Securities and Exchange Commission.

J.P. Morgan Securities LLC, BofA Securities, Inc., ING Financial Markets LLC and RBC Capital Markets, LLC are the arrangers.

Oaktree Specialty Lending is a Los Angeles-based specialty finance company managed by Oaktree Capital Group, LLC.

Energy Transfer active

Energy Transfer Operating’s 3.75% notes due May 15, 2030 (Baa3/BBB-/BBB-) were active in the secondary market over the session on Friday, sources said.

The notes softened about 4 bps to 189 bps bid and edged up to 104.92 from 104.15.

The company sold $1.5 billion of the long 10-year notes on Jan. 7 at 99.843 to yield 3.769% and a Treasuries plus 255 bps spread.

Energy Transfer is a natural gas midstream and intrastate transportation and storage company based in Dallas.

Western Midstream eases

Western Midstream Operating’s 4.05% notes due Feb. 1, 2030 (Ba1/BBB-/BBB-) eased about 8 bps on Friday to 236 bps bid, a market source said.

The company sold $1.2 billion of the notes on Jan. 9 at a spread of 220 bps over Treasuries.

The Woodlands, Texas-based company owns, develops and operates midstream energy assets.

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