Omers taps primary; Bristol-Myers Squibb deal on horizon; corporate inflows jump; Walmart soft

By Cristal Cody

Tupelo, Miss., April 25 – Omers Finance Trust priced $1.25 billion of five-year medium-term notes in a Rule 144A and Regulation S offering on Thursday following fixed-income investor calls earlier in the week.

Otherwise, market action was light with no reported high-grade issuers registered with the Securities and Exchange Commission.

Lipper US Fund Flows on Thursday reported corporate investment-grade fund inflows climbed to $5.86 billion for the week ended April 24. The total is the second largest inflow on record, a source said.

Corporate high-grade fund inflows totaled $2.31 billion in the week ended April 17, $3.47 billion in the previous week and $2.9 billion in the prior week.

Meanwhile, a major bond offering from Bristol-Myers Squibb Co. is expected on the horizon to fund its acquisition of Celgene Corp. with a deal being pegged in the $10 billion to $15 billion range.

High-grade supply has been light over the week with just over $6 billion of corporate bonds priced. Deal volume has thinned among a slew of corporate earnings releases in April.

Issuers including Royal Bank of Canada, Aqua America, Inc., Cantor Fitzgerald, LP and Penske Truck Leasing Co., LP/PTL Finance Corp. priced notes on Wednesday.

On Tuesday, Rogers Communications Inc., Kimberly-Clark Corp., Marubeni Corp. and Lloyds Bank Corporate Markets plc tapped the primary market.

On Monday, KeyCorp was the sole issuer with a $450 million preferred stock deal.

About $15 billion to $25 billion of volume was expected on average for the week from market sources.

The Markit CDX North American Investment Grade 32 index ended modestly weaker at a spread of 58 basis points.

In the secondary market, Walmart Inc.’s 3.25% notes due July 8, 2029 (Aa2/AA/AA) priced a week ago remained soft on Thursday after easing 5 bps in the previous session, a source said.

The notes were quoted going out at 68 bps bid.

The Bentonville, Ark.-based discount retailer sold $1.25 billion of the notes on April 16 at a Treasuries plus 67 bps spread.

Omers prices $1.25 billion

Omers Finance Trust priced $1.25 billion of 2.5% five-year medium-term notes on Thursday at a spread of mid-swaps plus 26 bps, or Treasuries plus 29.6 bps, according to a market source.

Price guidance was in the mid-swaps plus 27 bps area with initial price talk in the mid-swaps plus high 20 bps area.

BofA Merrill Lynch, HSBC Securities (USA) Inc., RBC Capital Markets, LLC and TD Securities (USA) LLC were the lead managers of the Rule 144A and Regulation S offering.

The issuer’s debt is guaranteed by Omers Administration Corp. (Aa1/AA+/AAA).

Omers Finance is a Toronto-based financing arm of the Ontario Municipal Employees Retirement System.

Bristol-Myers in pipeline

Bristol-Myers Squibb (A2/A+/A-) is expected to tap the primary market to help fund its acquisition of Celgene, according to a market source.

A deal is being pegged in the $10 billion to $15 billion area and may include dollar- and euro-denominated notes.

The companies announced the cash-and-stock transaction valued at about $74 billion in January.

The acquisition is expected to be funded through cash on hand and debt financing.

The merger is expected to close in the third quarter of this year.

Bristol-Myers Squibb and Celgene are biopharmaceutical companies based in New York and Summit, N.J., respectively.

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