uploads///Total IG Bond Issuance for WE July

Charter Dwarfs All High-Grade Bond Issuances Last Week

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Deals overview

US corporates dominated high-grade bond issuance in the week ended July 10, making up 54.4% of all issues. US financials accounted for 9.7% of all issues. SAS (supranational, agency, and sovereign) issuers formed 24.5% of all high-grade corporate bonds issued last week. Yankee bonds returned to the market with issuances worth $3.25 billion.

Last week, which ended on July 10, brought the year-to-date issuance of corporate high-grade bonds to $910.0 billion.

Issuances by high-grade corporates form part of the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD). Treasuries, the other high-grade bond category, are tracked by ETFs like the iShares 1-3 Year Treasury Bond ETF (SHY).

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Details of Charter Communications’ issue

Charter Communications (CHTR) provides entertainment, information, and communications solutions. For the week ended July 10, Charter issued bonds worth $15.5 billion, the largest of the week. The Ba1/BBB- rated bonds were issued through the following six tranches:

  • $2.0 billion in 4.7% five-year notes at a spread of 200 bps (basis points) over similar maturity Treasuries
  • $3.0 billion in 3.2% seven-year notes at a spread of 245 bps over similar maturity Treasuries
  • $4.5 billion in 4.5% ten-year notes at a spread of 260 bps over similar maturity Treasuries
  • $2.0 billion in 1.6% 20.25-year bonds at a spread of 325 bps over similar maturity Treasuries
  • $3.5 billion in 2.0% 30.25-year bonds at a spread of 335 bps over similar maturity Treasuries
  • $500 million in 2.8% 40.25-year bonds at a spread of 370 bps over similar maturity Treasuries

Charter Communications raised these bonds to finance its purchase of Time Warner Cable (TWC) and Bright House Networks.

Details of AIG’s issue

American International Group (AIG) raised Baa1/A- rated high-grade bonds worth $2.5 billion through the following three tranches:

  • $1.25 billion in 3.75% ten-year notes at a spread of 155 bps over similar maturity Treasuries
  • $500 million in 4.70% 20-year bonds at a spread of 170 bps over similar maturity Treasuries
  • $750 million in 4.80% 30-year bonds at a spread of 180 bps over similar maturity Treasuries
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Details of General Motors Financial’s issue

General Motors Financial is a subsidiary of General Motors (GM). It issued high-grade bonds rated Ba1/BBB- and worth $2.3 billion in two-parts:

  • $1.50 billion in 3.2% five-year notes at a spread of 170 bps over similar maturity Treasuries
  • $800 million in 4.3% ten-year notes at a spread of 210 bps over similar maturity Treasuries

Details of Toyota Motor Credit’s issue

Toyota Motor Credit is a subsidiary of Japanese auto giant Toyota Motor Corporation (TM). It issued high-grade bonds worth $2.25 billion. The Aa3/AA- rated bonds were issued through the following three parts:

  • $500 million in three-year FRNs (floating rate notes) at three-month LIBOR (London inter-bank offered rate) + 46 basis points
  • $1.25 billion in 1.55% three-year notes at a spread of 70 bps over similar maturity Treasuries
  • $500 million in 2.80% seven-year notes at a spread of 93 bps over similar maturity Treasuries
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