Motorola, O’Reilly tap primary market; high-grade inflows rise; week’s deal volume strong

By Cristal Cody

Tupelo, Miss., May 9 – Deal volume in the high-grade bond market on Thursday included two new issues.

Motorola Solutions, Inc. sold $650 million of 10-year senior notes.

O'Reilly Automotive, Inc. priced $500 million of 10-year senior notes.

In other activity, Lipper US Fund Flows reported that corporate investment-grade fund inflows rose to $3.33 billion for the week ended May 8, compared to inflows of $375 million in the previous week and $5.86 billion of inflows in the prior week.

Investment-grade supply has been heavy this week, which featured the year’s two biggest bond deals.

International Business Machines Corp. priced a $20 billion eight-part offering of notes in the biggest bond deal of the year on Wednesday.

On Tuesday, Bristol-Myers Squibb Co. sold $19 billion of senior notes in nine tranches.

More than $45 billion of high-grade bonds have priced week to date, in line with the $40 billion to $45 billion of supply expected by syndicate sources.

Market sources continue to keep an eye on hefty bond deals expected soon from T-Mobile U.S. Inc. and Fidelity National Information Services, Inc. following roadshows.

T-Mobile U.S. wrapped a roadshow on Wednesday for a bond offering to fund its acquisition of Sprint Corp.

Fidelity National Information Services is holding a roadshow and fixed investor calls through Friday for a multi-currency bond deal to help finance its acquisition of Worldpay Inc.

Elsewhere in the secondary market, trading volume has been lighter this week with $18.82 billion of bonds traded on Wednesday, $18.2 billion on Tuesday and $12.45 billion on Monday, according to Trace data.

“Dealer inventories are up this week around $1.4 [billion], which is less than we normally see and leaves a smaller than usual overhang for the secondary market going forward,” according to a BofA Merrill Lynch research note released on Thursday. “Generally speaking on days last year with the largest M&A deals, inventories rose about $2 [billion]. That is a testament to the current strength of the corporate bond market and if trade concerns fade spreads should perform really well into the summer.”

The Markit CDX North American Investment Grade 32 index eased more than 1 basis point to close the day at a spread of 63 bps.

Motorola sells $650 million

Motorola Solutions sold $650 million of 4.6% 10-year senior notes (Baa3/BBB-/BBB-) on Thursday at a spread of 215 bps over Treasuries, according to an FWP filing with the Securities and Exchange Commission.

The notes priced at 99.96 to yield 4.605%.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Goldman Sachs & Co. LLC were the bookrunners.

Motorola is a telecommunications company based in Schaumburg, Ill.

O'Reilly prices $500 million

O'Reilly Automotive sold $500 million of 3.9% 10-year senior notes (Baa1/BBB/) on Thursday at a spread of Treasuries plus 145 bps, according to an FWP filing with the SEC.

The notes priced at 99.991 to yield 3.901%.

Bookrunners were BofA Merrill Lynch, Wells Fargo Securities LLC, J.P. Morgan Securities and U.S. Bancorp Investments Inc.

O'Reilly Automotive is a Springfield, Mo.-based retailer of automotive aftermarket products.

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