uploads///US Investment Grade Bond Market Issuance

Issuance Volume Barely Changes: Investment-Grade Corporate Bonds


Jun. 10 2015, Updated 9:06 a.m. ET

Deals and volumes

Investment-grade corporate bonds worth $24.625 billion were issued in the primary market in the week ending June 5, 2015. This was 3.2% lower than issuance worth $25.45 billion in the previous week. June witnessed a moderate start with last week’s issuance. Also, the number of issuers rose to 22—higher than 18 in the previous week.

Last week, Treasury yields (SHY) jumped. Investment-grade corporate bonds tend to follow cues from Treasuries. They also saw yields surge. The jump was concentrated on the first and last trading days of the week. The rocketing yields lead to a fall in ETFs like the iShares iBoxx $ Investment Grade Corporate Bond Fund (LQD).

Petrobras (PBR)—the Brazilian energy major, Citigroup (C), metal part maker Precision Castparts (PCP), Marathon Oil (MRO), and Bank of Nova Scotia (BNS) were the biggest issuers of investment-grade bonds in the week ending June 5.

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Issuance by quality and maturity

Fixed-rate issues formed 95.9% of all the issuance last week. Looking at the issues’ credit ratings, BBB rated issuers were the most prolific. They made up 57.6%, or $14.175 billion, in issuance. They were followed by A rated issuers that formed 33.5% of the week’s issuance.

In terms of maturity, the largest chunk of issuance, accounting 40.3% of all the issues, was in the ten-year maturity category. It was followed by the five-year maturity category. It commanded 25.6% of the total issuance. The more than 30-year maturity category saw issuance worth $2.5 billion after a lull in the previous week. Meanwhile, perpetuals saw issuance that was only worth $500 million last week. It saw issuance worth $2.8 billion in the previous week.

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


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