uploads///Total IG Bond Issuance for the Week Ending November

AstraZeneca Issued High-Grade Bonds to Acquire ZS Pharma

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Nov. 20 2020, Updated 5:26 p.m. ET

Deals Overview

US corporates were the biggest issuers of high-grade bonds in the week ending November 13, making up 60.4%, or $19.9 billion, of all issues. Yankee issuers were the second biggest, making up 19.4% of all issues. Meanwhile, US financials issued $4.6 billion worth of high-grade bonds and made up 13.8% of the total issuance. The week ending November 13 brought the YTD (year-to-date) issuance of high-grade corporate bonds to $1.4 trillion.

 

Issuances by high-grade corporates form part of mutual funds such as the Janus Flexible Bond Fund Class A (JDFAX) and the TIAA-CREF Bond Index Fund Retail Class (TBILX).

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Details of AstraZeneca’s issue

AstraZeneca (AZN) is a global biopharmaceutical company. It issued A2/A rated high-grade bonds worth $6.0 billion via five parts:

  • $400 million in three-year FRNs (floating-rate notes) issued at three-month LIBOR + 53 basis points
  • $1.0 billion in 1.75% three-year notes issued at a spread of 55 basis points over similar-maturity Treasuries
  • $1.6 billion in 2.38% five-year notes issued at a spread of 75 basis points over similar-maturity Treasuries
  • $2.0 billion in 3.38% ten-year notes issued at a spread of 115 basis points over similar-maturity Treasuries
  • $1.0 billion in 4.38% 30-year bonds issued at a spread of 135 basis points over similar-maturity Treasuries

AstraZeneca will use the proceeds of the issue to fund the acquisition of ZS Pharma (ZSPH).

Details of Chevron Corporation’s issue

Chevron Corporation (CVX) is one of the world’s leading integrated energy companies. It issued Aa1/AA rated high-grade bonds worth $5.0 billion in six parts:

  • $500 million in two-year FRNs issued at three-month LIBOR + 36 basis points
  • $1.0 billion in 1.34% two-year notes at a spread of 45 basis points over similar-maturity Treasuries
  • $250 million in three-year FRNs issued at three-month LIBOR + 51 basis points
  • $1.25 billion in 1.79% three-year notes at a spread of 55 basis points over similar-maturity Treasuries
  • $1.25 billion in 2.42% five-year notes at a spread of 67 basis points over similar-maturity Treasuries
  • $750 million in 3.33% ten-year notes at a spread of 97 basis points over similar-maturity Treasuries
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Details of Australia and New Zealand Banking Group’s issue

The Australia and New Zealand Banking Group issued Aa2/AA rated high-grade bonds worth $3.25 billion in four parts:

  • $750 million in three-year FRNs issued at three-month LIBOR + 75 basis points
  • $750 million in 2.0% three-year notes at a spread of 80 basis points over similar-maturity Treasuries
  • $1.0 billion in 2.7% five-year notes at a spread of 100 basis points over similar-maturity Treasuries
  • $750 million in 3.7% ten-year notes at a spread of 140 basis points over similar-maturity Treasuries

Details of MetLife’s issue

MetLife (MET) is a leading global provider of insurance, annuities, and employee benefit programs through its subsidiaries and affiliates. It issued A3/A- rated high-grade bonds worth $1.25 billion in two parts:

  • $500 million in 3.6% ten-year notes at a spread of 125 basis points over similar-maturity Treasuries
  • $750 million in 4.6% long 30-year bonds at a spread of 150 basis points over similar-maturity Treasuries
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