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Deutsche Bank Issues the Most High-Grade Bonds Last Week

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Deals overview

Supranational, agency, and sovereign (or SAS) returned strongly to the market after no activity last week. They were the highest issuers of high-grade bonds in the week ended August 21, making up 43.1% of all issues.

US corporates and financials accounted for approximately the same share, 16.9%, of total issuance. Meanwhile, Yankee bond issuers accounted for 14.4% of total issuance. After three straight weeks of no activity, emerging market (or EM) issuers issued bonds worth $1.38 billion, or 8.8% of the total issuance.

The week ended August 21 brought the year-to-date issuance of corporate high-grade bonds to $1.094 trillion.

Issuances by high-grade corporates form part of the Vanguard Total Bond Market Index Fund (VBMFX). Treasuries, the other high-grade bond category, are tracked by mutual funds like the PIMCO Total Return Fund (PTTAX).

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Details of Deutsche Bank’s issue

Deutsche Bank AG (DB) issued bonds worth $1.3 billion, the largest issuance last week. The A3/BBB+ rated bonds were issued through the following two tranches:

  • $300 million in five-year FRNs (floating rate notes) at three-month LIBOR (London interbank offered rate) + 131 basis points
  • $1.0 billion in 2.950% five-year notes at a spread of 143 bps over similar-maturity Treasuries

Details of Fifth Third Bank’s issue

Fifth Third Bank, a subsidiary of Fifth Third Bancorp (FITB), issued A3/A- rated high-grade bonds worth $1.25 billion in the following two parts:

  • $250 million in three-year FRNs at three-month LIBOR + 91 basis points
  • $1.0 billion in 2.150% three-year notes at a spread of 110 bps over similar-maturity Treasuries
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Details of Abbey National Treasury Services’ issue

Abbey National Treasury Services raised A2/A rated high-grade bonds worth $1.0 billion through the following two tranches:

  • $250 million in three-year FRNs at three-month LIBOR + 85 basis points
  • $750 million in 2.0% three-year notes at a spread of 105 bps over similar-maturity Treasuries

Details of Plains All American Pipeline’s issue

Plains All American Pipeline (PAA) issued high-grade bonds worth $1.0 billion last week. The single-tranche Baa2/BBB+ rated issue was for ten years. The bonds were issued at a spread of 250 bps over similar-maturity Treasuries.

Details of Hershey’s issue

The Hershey Company (HSY) raised A1/A rated high-grade bonds worth $600 million through the following two tranches:

  • $300 million in 1.6% three-year notes at a spread of 55 bps over similar-maturity Treasuries
  • $300 million in 3.2% ten-year notes at a spread of 105 bps over similar-maturity Treasuries
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