uploads///US Investment Grade Bond Market Issuance

Investment-Grade Corporate Bond Issuance Surges

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Dec. 8 2015, Updated 7:41 a.m. ET

Deals and volumes of investment-grade corporate bonds

Investment-grade corporate bonds worth $33.5 billion were issued in the primary market in the week ending December 4, 2015. Investment-grade corporate bond issuance rose from $2.7 billion issued in the previous week. The number of issuers also increased to 26 from four in the previous week.

Last week, yields on investment-grade corporate bonds rose. And as a result, weekly returns of the John Hancock Bond Fund Class A (JHNBX) and the Strategic Advisers Core Income Fund (FPCIX) fell 0.19% and 0.15%, respectively.

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Major issuers

McDonald’s (MCD), Wells Fargo and Company (WFC), Citigroup (C), Solvay Finance America (the financial arm of international chemical group Solvay SA), and Analog Devices (ADI) were among the biggest issuers of investment-grade bonds in the week ending December 4.

Issuance by quality and maturity

Fixed-rate issues made up 95.1% of the total issuance last week. Floating-rate issues worth $1.7 billion were raised last week.

In terms of the credit ratings of issuers, BBB rated issuers were the most prolific. They made up 68.3%, or $22.9 billion, of total issuance. They were followed by A rated issuers, which formed 22.6% of the week’s issuance. AA rated papers made up 8.2% of the total issuance.

In terms of maturity, the largest chunk of issuance, making up 36.8% of all issues, was the ten-year maturity category. This was followed by the three-year maturity category, which commanded 27.2% of the total issuance. The five-year maturity category made up 20.9% of the total issuance.

In the long-term maturity issuance, the 30-year category made up 14.1% of the total issuance, while the >30-year category and perpetuals did not see any issuance last week.

In the next part of this series, we’ll highlight the major deals—including pricing, credit ratings, and yields.

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