Corporate supply quiet; Fannie Mae prices; high-grade inflows heavy; new issues stay tight

By Cristal Cody

Tupelo, Miss., Feb. 7 – Investment-grade issuers stayed on the sidelines on Thursday with no corporate deals priced during the session.

The only reported issuance was a $2 billion offering of five-year notes that Fannie Mae priced early Thursday.

Week to date, investment-grade issuers have sold more than $10 billion of bonds.

About $15 billion to $20 billion of supply was forecasted for the week with some sources expecting only about $10 billion of issuance.

Most of the Asian markets have been closed this week for the Lunar New Year holiday.

Deal volume is expected to pick up in the week ahead, a source said.

For the week ended Wednesday, Lipper US Fund Flows reported net inflows jumped to $2.67 billion for corporate investment-grade funds, up from $34 million in the previous week.

Inflows to investment-grade bond funds and exchange-traded funds have been substantial this week “after the super-dovish FOMC meeting,” according to a research note by BofA Merrill Lynch credit strategist Hans Mikkelsen.

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