High-grade corporate deal pipeline to slow in back half of January; inflows cool

By Cristal Cody

Tupelo, Miss., Jan. 19 – The spigot to the high-grade corporate deal pipeline is expected to slow after a torrent of bond issuance in the first half of January put the year-to-date total at more than $150 billion.

Nearly $50 billion of bonds priced just this past week from the corporate side, along with more than $20 billion from issuers in the supra, sovereign and agencies spaces.

Strong bank supply was expected and did not disappoint with more than $30 billion of new paper sold over the week from names including JPMorgan Chase & Co., which priced $8.5 billion of notes in four tranches, but more may still be lurking in the wings, sources reported.

In 2023, the big six U.S. banks priced $9 billion of new paper in the back half of January, while in 2022, $33 billion of notes priced after fourth-quarter earnings results were released, according to a BofA Securities Inc. research report.

About $20 billion to $25 billion of additional corporate bond issuance is forecast for the week ahead, according to informed market sources.

ETF inflows decline

Year-to-date net inflows into short-intermediate corporate investment-grade debt funds/ETFs totaled $227.3 million over the past week ended Wednesday, according to Refinitiv Lipper U.S. Fund Flows.

Inflows were down from $837.6 million in the prior week.

Net inflows year to date total $2.7 billion, a source said.

In high-grade bond funds and ETFs, including corporates, agencies, mortgages and Treasuries, overall inflows declined to $3.49 billion in the week ended Wednesday from a hefty $9.35 billion inflow in the prior week, according to a BofA Securities note.

Slower high-grade ETF inflows made up the biggest decline after dropping to $2.43 billion this week from $8.32 billion in the prior week.

Inflows into investment-grade funds improved slightly to $1.06 billion for the week ended Wednesday from $1.03 billion a week earlier, BofA said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.