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EDF SA Issued ~$4.8 Billion in High-Grade Bonds Last Week

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Overview of deals

Yankee issuers were the biggest issuers of high-grade bonds in the week ended October 9. They accounted for 33.9%, or $9.0 billion, of all the issues. US corporates were the second biggest issuers. They accounted for 25.6% of all the issues. Supranational, agencies, and sovereigns issued $6.5 billion worth of high-grade bonds. They accounted for 24.5% of the total issuance.

After there wasn’t any issuance in the previous week, US financials and emerging markets issued ~$1.8 billion and $2.5 billion worth of high-grade bonds. They accounted for 6.6% and 9.4%, respectively, of the total issuance last week.

The week ended October 9 brought the YTD (year-to-date) issuance of high-grade corporate bonds to ~$1.3 trillion.

High-grade corporates’ issuances form part of mutual funds like the Vanguard Total Bond Market Index Fund (VBMFX) and the PIMCO Total Return A (PTTAX).

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Details of EDF SA’s issue

Électricité de France SA, or EDF SA, is based in France. It produces, markets, and distributes electricity. EDF SA issued A1/A rated high-grade bonds worth ~$4.8 billion in five parts:

  • $1.5 billion in ~2.4% five-year notes at a spread of 115 basis points over similar-maturity Treasuries
  • ~$1.3 billion in ~3.6% ten-year green bonds at a spread of 165 basis points over similar-maturity Treasuries
  • $500 million in ~4.8% 20-year bonds at a spread of 200 basis points over similar-maturity Treasuries
  • ~$1.2 billion in ~5.0% 30-year bonds at a spread of 205 basis points over similar-maturity Treasuries
  • $350 million in 5.2% 40-year bonds at a spread of 245 basis points over similar-maturity Treasuries

Details of PepsiCo’s issue

PepsiCo (PEP) is a leading food and beverage company with a global portfolio of diverse brands. PepsiCo issued A1/A rated high-grade bonds worth $3.0 billion in four parts:

  • $700 million in two-year floating-rate notes at three-month LIBOR[1. IntercontinentalExchange London Interbank Offered Rate] + 35 basis points
  • $450 million in 1.0% two-year notes at a spread of 47 basis points over similar-maturity Treasuries
  • $1.1 billion in ~2.2% five-year notes at a spread of 77 basis points over similar-maturity Treasuries
  • $750 million in ~4.5% long 30-year bonds at a spread of 150 basis points over similar-maturity Treasuries
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General Motors Financial Company’s issue

General Motors Financial Company is a subsidiary of General Motors (GM). It issued Ba1/BBB- rated high-grade bonds worth ~$1.8 billion in two parts:

  • $250 million in long three-year floating-rate notes at three-month LIBOR + 206 basis points
  • $1.5 billion in 3.1% long three-year notes at a spread of 220 basis points over similar-maturity Treasuries

Details of Rolls-Royce’s issue

Rolls-Royce issued A3/A rated high-grade bonds worth $1.5 billion in two parts:

  • $0.5 billion in ~2.4% five-year notes at a spread of 105 basis points over similar-maturity Treasuries
  • $1.0 billion in 3.6% ten-year notes at a spread of 160 basis points over similar-maturity Treasuries

Details of Ford Motor Credit Company’s issue

Ford Motor Credit Company is a subsidiary of Ford Motor Company (F). It issued high-grade bonds worth $1.0 billion last week. The single-tranche Baa3/BBB- rated notes were issued for three years with a coupon rate of ~2.6%. The high-grade bonds were issued at a spread of 167 basis points over similar-maturity Treasuries.

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