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Daimler Finance Raised the Highest Volume of High Grade Bonds

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Deals overview

Yankee bond issuers dominated the investment-grade issues with issuance worth $7.55 billion, or 34.6%, of total issuance. US corporates were the second highest issuers of high grade bonds in the week ended July 31, making up 32.0% of all issues. Meanwhile, US financials accounted for 28.8% of all issues.

Issuances by high grade corporates form part of the mutual funds such as the PIMCO Total Return A (PTTAX) and the Oppenheimer Core Bond Fund (OPIGX).

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Details of Daimler Finance’s issue

Daimler Finance North America is a subsidiary of Daimler North America Corporation. It issued bonds worth $3.5 billion, the largest issuance last week. The six-tranche issue was rated A3/A- and consisted of:

  • $150 million in two-year FRNs (floating rate notes) at three-month LIBOR + 55 basis points
  • $550 million in two-year FRNs at three-month LIBOR + 71 basis points
  • $450 million in 1.6% two-year notes at a spread of 95 basis points over similar-maturity Treasuries
  • $1.0 billion in 2.0% three-year notes at a spread of 105 basis points over similar-maturity Treasuries
  • $850 million in 2.7% five-year notes at a spread of 115 basis points over similar-maturity Treasuries
  • $500 million in 3.5% ten-year notes at a spread of 131 basis points over similar-maturity Treasuries

Details of Bank of America’s issue

Bank of America (BAC) issued high grade bonds worth $2.5 billion last week. The single-tranche issue was for ten years and had a rating of Baa1/A-. The high grade bonds carried a coupon of 3.875% and were issued at a spread of 167 basis points over similar maturity Treasuries.

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Details of Ford Motor Credit’s issue

Ford Motor Credit, the financial services arm of Ford Motor Company (F), issued high grade bonds worth $2.0 billion. The two-tranche issue with a rating of Baa3/BB+ consisted of:

  • $1.30 billion in 3.157% five-year notes at a spread of 155 basis points over similar-maturity Treasuries
  • $700 million in 4.134% ten-year notes at a spread of 187.5 basis points over similar-maturity Treasuries

Details of American Express Credit’s issue

American Express Credit, part of American Express (AXP), issued high grade bonds worth $1.4 billion. The two-tranche issue with a rating of A2/A- consisted of:

  • $500 million in three-year FRNs at three-month LIBOR + 61 basis points
  • $900 million in 1.8% three-year notes at a spread of 83 basis points over similar-maturity Treasuries

Details of Bank of Montreal’s issue

Bank of Montreal (BMO) issued bonds with a Aa3/A+ rating worth $1.25 billion in two tranches:

  • $500 million in three-year FRNs at three-month LIBOR + 61 basis points
  • $750 million in 1.8% three-year notes at a spread of 83 basis points over similar-maturity Treasuries
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