Morning Commentary: Oneok plans bond offering; market eyes Walmart deal; May inflows decline

By Cristal Cody

Tupelo, Miss., June 19 – Midstream service provider Oneok, Inc. is offering two tranches of notes on Tuesday in the high-grade primary market.

Walmart Inc. also is expected to bring a bond deal during Tuesday’s session or later this week following fixed income investor calls held Monday, according to a market source.

Barclays, Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are the arrangers.

Otherwise, reported deal activity was light over the morning following Bayer AG’s $15 billion eight-part issuance of senior notes and Duke Energy Florida, LLC’s $1 billion two-tranche sale of first mortgage bonds on Monday.

About $35 billion to as much as $50 billion of volume is forecast for the mid-June week, which typically has light volume, according to market sources.

The financial markets opened Tuesday on a risk-off tone with Treasuries higher, a source said.

Elsewhere, final fund flows to U.S.-domiciled high-grade funds and ETFS for May declined to $8.9 billion from $12.2 billion in April, Yuri Seliger, an analyst with BofA Merrill Lynch, said in a note released Tuesday.

“This makes May’s inflow the lowest inflow since December 2016,” Seliger said. “This subdued pace of inflows is consistent with our expectations.”

Inflows to short-term high grade rose to $6.4 billion in May from $3.4 billion in April, while outside-of-short-term inflows dropped to $2.5 billion from $8.8 billion in April, according to the note. Total return funds and ETFs had a $2 billion outflow in May, compared to a $200 million outflow in April and a $2.6 billion inflow in March.

“So far in June the average pace of inflows has been similar to that in May,” Seliger said.

In other activity, the investment-grade secondary market ended Monday’s session with $13.91 billion of trading volume, according to Trace.

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