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Disney Issues $2.0 Billion in High-Grade Bonds Last Week

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Deals overview

US corporates were the biggest issuers of high-grade bonds in the week ended September 18, making up 54.2% of all issues. Emerging markets (or EM) saw only one issuer, the Industrial and Commercial Bank of China, with issuance worth $2.0 billion. This category made up 19.9% of all issues. Meanwhile, US financials accounted for 19.4% of all issues with issuance worth $1.95 billion.

The week ended September 18 brought the year-to-date issuance of high-grade corporate bonds to $1.16 trillion.

Issuances by high-grade corporates form part of mutual funds such as the Vanguard Total Bond Market Index Fund (VBMFX) and the PIMCO Total Return A Fund (PTTAX).

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Details of Disney’s issue

The Walt Disney Company (DIS) issued A2/A rated high-grade bonds worth $2.0 billion in the following three parts:

  • $500 million in 1.50% three-year notes at a spread of 50 bps (basis points) over similar-maturity Treasuries
  • $750 million in 2.15% five-year notes at a spread of 70 bps over similar-maturity Treasuries
  • $750 million in 3.15% ten-year notes at a spread of 100 bps over similar-maturity Treasuries

Details of Industrial and Commercial Bank of China’s issue

The Industrial and Commercial Bank of China issued bonds worth $2.0 billion last week. The single-tranche Baa3/BBB+ rated bonds were issued for ten years with a coupon rate of 4.875%. The high-grade bonds were issued at a spread of 275 bps over similar-maturity Treasuries.

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Details of St. Jude Medicals issue

St. Jude Medical (STJ) issued Baa2/A- rated high-grade bonds worth $1.5 billion in the following three parts:

  • $500 million in 2.000% three-year notes at a spread of 105 bps over similar-maturity Treasuries
  • $500 million in 2.800% five-year notes at a spread of 130 bps over similar-maturity Treasuries
  • $500 million in 3.875% ten-year notes at a spread of 175 bps over similar-maturity Treasuries

Details of Aviation Capital Group’s issue

Aviation Capital Group (ACG), a wholly owned subsidiary of Pacific Life Insurance Company, issued BBB- rated high-grade bonds worth $900 million in the following two parts:

  • $600 million in 2.875% three-year notes at a spread of 200 bps over similar-maturity Treasuries
  • $300 million in 4.875% ten-year notes at a spread of 275 bps over similar-maturity Treasuries

Details of AutoNation’s issue

AutoNation (AN), the largest automotive retailer in the United States, issued Baa3/BBB- rated high-grade bonds worth $750 million in the following two parts:

  • $300 million in 3.350% long five-year notes at a spread of 175 bps over similar-maturity Treasuries
  • $450 million in 4.500% ten-year notes at a spread of 225 bps over similar-maturity Treasuries
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