High-grade supply thins; Fluor, Pricoa sell notes; light volume likely until after holiday

By Cristal Cody

Tupelo, Miss., Aug. 20 – High-grade supply stayed light as the week kicked off on Monday.

Fluor Corp. priced $600 million of 10-year senior notes following the company’s fixed-income investor calls last week.

Pricoa Global Funding I brought $500 million of five-year medium-term notes to the primary market on top of guidance.

Syndicate sources expect deal volume to thin over the week with only about $5 billion to $10 billion of issuance predicted.

This week also includes the annual Federal Reserve’s economic policy symposium in Jackson Hole, Wyo., that starts on Thursday.

New issue volumes for the last two weeks before the Labor Day holiday average just $4 billion and $10 billion over the historical period from 2011 to 2017, according to a BofA Merrill Lynch research report released Monday.

Summer deal volumes so far are “running 35% below last year’s pace and dealer inventories are thus very low,” the note said.

Looking ahead to September, syndicate sources predict as little as $100 billion to as much as $150 billion of high-grade issuance for the month.

The Markit CDX North American Investment Grade 30 index ended about 0.5 basis point softer on the day at a spread of 61.5 bps.

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