uploads///US Investment Grade Bond Market Issuance

Issuance of Investment-Grade Corporate Bonds Fell Last Week

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Nov. 20 2020, Updated 11:35 a.m. ET

Deals and volumes for investment-grade corporate bonds

Investment-grade corporate bonds worth $21.325 billion were issued in the primary market in the week ending June 19, 2015. This was 50.5% less than issuance worth $43.075 billion in the previous week. Participants wanted to go through the FOMC’s (Federal Open Market Committee) June 2015 monetary policy statement before raising funds. The number of issuers fell to 14 from 23 in the previous week.

Last week, Treasury yields (SHY) fell across the yield curve from the previous week’s level. Investment-grade corporate bonds, which tend to follow cues from Treasuries, also saw a fall in yields, with the sharpest decline seen on the last trading day of the week. A small rise in yields led to a fall in the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), among others.

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Major issuers

The soon-to-be-listed Baxalta, a wholly owned subsidiary of Baxter International (BAX), Energy Transfer Partners (ETP), JPMorgan Chase (JPM), Occidental Petroleum (OXY), and Cardinal Health (CAH) were the biggest issuers of investment-grade bonds in the week ending June 19.

Issuance by quality and maturity

Fixed-rate issues formed 98.2% of all issuances last week. Looking at the credit ratings of issues, BBB–rated issuers continued to be the most prolific. They made up 48.8%, or $10.405 billion, of total issuance. They were followed by A–rated issuers, which formed 25.4% of the week’s issuance.

In terms of maturity, the largest chunks of issuance, making up 23% each of all issues, were in the five-year- and the ten-year-maturity categories. These were followed by the three-year-maturity category, which commanded 17.4% of the total issuance. Neither the over-30-year-maturity category nor perpetuals saw any issuances for the second successive week.

In the next part of this series, we’ll highlight the major deals—including pricing, credit rating, and yields.

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