ServiceNow, Prologis, Pioneer tap high-grade primary; inflows decline; Schlumberger improves

By Cristal Cody

Tupelo, Miss., Aug. 6 – High-grade issuers priced more than $4 billion of bonds on Thursday, pushing week-to-date deal volume to about $34 billion.

ServiceNow, Inc. (Baa1/BBB+/) sold $1.5 billion of 10-year senior notes after receiving its first issuer rating from Moody’s Investors Service on Thursday and a rating from S&P on Wednesday.

Prologis, LP priced $1.25 billion of fixed-rate notes (A3/A-A-) in two tranches, including a 10-year green bond.

Also, Pioneer Natural Resources Co. sold $1.1 billion of 10-year senior notes (Baa2/BBB/BBB) on Thursday.

In other primary action, Equitable Holdings, Inc. priced $500 million of perpetual preferred stock (Ba1/BBB-/) in a deal upsized from $300 million.

About $25 billion to $35 billion of issuance was expected by market participants for the week.

High-grade corporate funds inflows declined slightly over the past week ended Wednesday to $7.21 billion from $7.9 billion in the prior week, according to Refinitive Lipper US Fund Flows.

Market tone was mostly positive over the day as participants digested economic data.

The Labor Department reported initial unemployment claims for the week ended Aug. 1 totaled a seasonally adjusted 1,186,000, down 249,000 from the previous week’s revised level and below forecasts of a 1.4 million tally.

The Markit CDX North American Investment Grade 33 index closed out less than 1 basis point tighter at a spread of 64.67 bps.

The iShares iBoxx Investment Grade Corporate Bond ETF rose 0.43% to 139.15.

The PIMCO Investment Grade Corporate Bond Index improved 0.15% to close at 117.71.

New issues firm

In the secondary market, high-grade issues priced this week are mixed but mostly trading better than issuance, according to market sources.

Activision Blizzard, Inc.’s $2 billion of senior notes (Baa1/A-/) priced in two tranches on Wednesday firmed about 7 bps to 8 bps.

The company’s 2.5% notes due Sept. 15, 2050 tightened to 122 bps bid.

Activision Blizzard sold $1.5 billion of the notes at a Treasuries plus 130 bps spread.

Schlumberger Investment SA 2.65% notes due June 26, 2030 (A2/A/) reopened on Tuesday headed out stronger with a 104 handle.

The notes were last seen at a spread of 167 bps bid.

Schlumberger priced a $350 million reopening to the notes on Tuesday at 102.635 and a spread of Treasuries 173 bps.

The company originally sold $900 million of the notes on June 17 at 99.608 to yield 2.695%, or Treasuries plus 195 bps. The total outstanding is now $1.25 billion.

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