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Citigroup Issued $4.5 Billion Worth of High-Grade Bonds Last Week

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Deals overview

US financials were the biggest issuers of high-grade bonds in the week ended October 23, 2015, making up 31.4%, or $8.0 billion, of all issues. Supranational, agencies, and sovereigns (or SAS) were the second biggest issuers, making up 28.5% of all issues. US corporates issued $6.3 billion worth of high-grade bonds and made up 24.6% of the total issuance.

The week ended October 23 brought the year-to-date issuance of high-grade corporate bonds to $1.3 trillion.

Issuances by high-grade corporates form part of mutual funds such as T. Rowe Price New Income Fund (PRCIX) and the Strategic Advisers Core Income Fund (FPCIX).

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Details of Citigroup’s issue

Citigroup (C) issued high-grade bonds worth $4.5 billion in the following three parts:

  • $300 million in five-year FRNs (floating rate notes) rated Baa1/A- and issued at three-month LIBOR + 131 bps (basis points)
  • $2.7 billion in 2.7% five-year notes rated Baa1/A- and issued at a spread of 133 bps over similar-maturity Treasuries
  • $1.5 billion in 4.5% 12-year bonds rated Baa3/BBB+ and issued at a spread of 233 bps over similar-maturity Treasuries

Details of Coca-Cola’s issue

Coca-Cola (KO) issued Aa3/AA rated high-grade bonds worth $4.0 billion in the following three parts:

  • $750 million in 0.88% two-year notes at a spread of 30 bps over similar-maturity Treasuries
  • $1.5 billion in 1.9% five-year notes at a spread of 57 bps over similar-maturity Treasuries
  • $1.75 billion in 2.9% ten-year notes at a spread of 87 bps over similar-maturity Treasuries
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Details of JPMorgan Chase’s issue

JPMorgan Chase & Co (JPM) issued A3/A rated high-grade bonds worth $3.0 billion in the following two parts:

  • $500 million in five-year FRNs issued at three-month LIBOR + 120.5 bps
  • $2.5 billion in 2.6% five-year notes at a spread of 123 bps over similar-maturity Treasuries

Details of Royal Bank of Canada’s issue

Royal Bank of Canada (RY) issued high-grade bonds worth $1.5 billion in the week ended October 23, 2015. The single-tranche Aa3/AA- rated notes were issued for five years with a coupon rate of 2.4%. The high-grade bonds were issued at a spread of 95 bps over similar-maturity Treasuries.

Details of FedEx’s issue

FedEx (FDX) issued high-grade bonds worth $1.3 billion in the week ended October 23. The single-tranche Baa1/BBB rated notes were issued for 30 years with a coupon rate of 4.8%. The high-grade bonds were issued at a spread of 187.5 bps over similar-maturity Treasuries.

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