Morning Commentary: AerCap plans new issue, add-on; RenaissanceRe on tap; inflows eyed

By Cristal Cody

Tupelo, Miss., March 27 – AerCap Ireland Capital DAC and AerCap Global Aviation Trust early Wednesday offered new senior notes and an add-on to their 4.875% senior notes due Jan. 16, 2024 in the high-grade primary market.

The reopened notes were first priced on Jan. 9 in a $400 million tranche at 99.833 to yield 4.913%, or a Treasuries plus 235 basis points spread.

In other market activity on Wednesday, RenaissanceRe Holdings Ltd. is expected to continue to hold fixed income investor calls for an offering of 10-year senior notes.

The investor calls began on Tuesday.

High-grade issuers have priced more than $10 billion of bonds week to date, led by Mars Inc.’s $5 billion eight-part issue of senior notes that priced on Tuesday.

About $20 billion of investment-grade supply was expected by syndicated sources for the week.

In the secondary market, Mars’ notes tightened about 3 bps to 8 bps across the eight-part deal, a source said.

The company’s $700 million tranche of 3.2% notes due April 1, 2030, which priced with a Treasuries plus 82 bps spread, firmed about 4 bps.

Secondary market volume rose to $24.98 billion on Tuesday from $20.36 billion on Monday, according to Trace data.

Meanwhile, based on daily fund and ETF inflows, “March is on track to set a new monthly record,” according to a BofA Merrill Lynch research note released on Wednesday.

“Moreover, flows could accelerate even further into April,” the note said.

The previous record inflow was $38.4 billion in January of 2018.

So far in March, inflows to U.S. high-grade funds and ETFs have averaged $846 million per day and are exceeding the $800 million daily average seen during the record month in 2018, the note said.

“Flows follow returns, and the drop in interest rates since Monday of last week should encourage potentially even stronger inflows in April,” the report said.

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