uploads///Total IG Bond Issuance for WE April

Yankee Bonds Continue to Dominate High-Grade Bond Issuance



Deals overview

Yankee bonds continued to dominate issuance for the third successive week, making up 50.0% of all issues. US corporates came back into the market, accounting for 31.3% of all issues in the week. The week ended April 3 brought the year-to-date issuance of corporate investment-grade debt to $448.63 billion. There were no SAS or EM issuances last week.

This year’s single-largest issuance was by Actavis Plc (ACT), a manufacturer of generic, brand, and biosimilar pharmaceuticals. The company issued bonds worth $21 billion in the week to March 6. This was the second largest deal ever behind Verizon’s (VZ) $49 billion issue in September 2013. VZ’s debt issues form part of the iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD). Exxon Mobil’s (XOM) seven-part $8.0 billion issue was another jumbo deal in March.

Last week, Telstra, Molex Electronic Tech (MOLX), and Stadshypotek AB issued bonds worth $1.0 billion each.

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Details of Telstra’s issue

Australia-based Telstra is a domestic and international telecommunications provider. It issued bonds worth $1.0 billion. The A2/A rated sale had a 3.125% coupon for a ten-year bond. It was issued at a spread of 118 bps (basis points) over similar maturity Treasuries.

Details of Molex Electronic Tech’s issue

Molex Electronic Tech (MOLX) also issued investment-grade bonds worth $1.0 billion. The Baa3/BBB rated two-tranche issue consisted of the following:

  • $500 million in 2.878% five-year notes at a spread of 155 bps over similar maturity Treasuries
  • $500 million in 3.90% ten-year notes at a spread of 205 bps over similar maturity Treasuries

Details of other issues

Principal Life Global Funding II (PFG) issued bonds worth $500 million. The A1/A+ rated bonds carried a coupon of 2.2% and had a maturity of five years. They were issued at a spread of 85 bps over similar maturity Treasuries.

Citizens Financial Group (CFG) issued bonds worth $250 million. The BB rated perpetual bonds were preferred at 5.50%.


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