IBM issues bonds; funds see $2.8 billion inflows; spreads tighten on improved tone

By Aleesia Forni and Cristal Cody

Virginia Beach, Oct. 31 – International Business Machines Corp. priced a new offering of senior notes on Friday, capping off a strong week for investment-grade bonds.

The computer company brought to market a $1.1 billion offering of seven-year floating-rate notes during the session.

The trade pushed the week’s supply to more than $22 billion, falling in line with what sources had predicted to be $20 billion to $25 billion of new issuance.

Meanwhile, cash continued to pour into investment-grade bond funds, with Lipper reporting staggering net inflows of $2.78 billion for the week ended Oct. 29.

This figure is up significantly from last week’s $390 million of inflows, bringing the year-to-date total inflows to more than $70 billion.

Looking ahead, players are gearing up for a busy November for the investment-grade primary bond market.

Around $25 billion to $30 billion of supply is expected for the first week of the new month.

“Mostly corporates next week,” a market source said of the upcoming calendar.

In the Canadian primary market, Hydro-Quebec priced C$500 million of 4% series JQ debentures due Feb. 15, 2055 (Aa2/A+/DBRS: A) at 108.041 to yield 3.619% on Friday, according to the company and a market source.

National Bank Financial Inc. was the bookrunner.

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