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Metlife Global Funding I Issued $1.25 Billion in High-Grade Bonds

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Overview of the week’s deals

In the week ended November 27, 2015, there were only four issuers. Three US financials and one Yankee issuer raised money via high-grade bonds.

US financials were the biggest issuers of high-grade bonds in the week ended November 27, making up 81.1%, or $2.15 billion, of all issues. However, Yankee issuers were the only other issuers, making up 18.9% of all issues. US corporates, emerging markets, and the sovereign agencies and supranational sector did not see any issuances last week. The week ended November 27 brought the year-to-date issuance of high-grade corporate bonds to $1.44 trillion.

Issuances by high-grade corporates form part of mutual funds like the Nuveen Short-Term Bond Fund – Class A (FALTX) and the TIAA-CREF Bond Index Fund – Retail Class (TBILX).

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Details of Metlife Global Funding I issue

A subsidiary of MetLife, Inc. (MET), Metlife Global Funding I is a special purpose statutory trust. It issued $1.25 billion in high-grade bonds rated Aa3/AA- in two parts:

  • $500 million in 1.95% three-year funding agreement-backed notes issued at a spread of 73 basis points over similar-maturity Treasuries
  • $750 million in 2.50% five-year funding agreement-backed notes issued at a spread of 83 basis points over similar-maturity Treasuries

Details of HCP Inc.’s issue

HCP Inc. (HCP) is a fully integrated real estate investment trust (or REIT) serving the healthcare industry. It issued high-grade bonds worth $600 million last week. The single-tranche Baa1/BBB+ rated seven-year issue was raised at a coupon of 4.0%. The high-grade bonds were issued at a spread of 205 basis points over similar-maturity Treasuries.

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Details of Lloyds Banking Group Plc’s issue

Lloyds Banking Group Plc (LYG) is financial services group based in the United Kingdom. It issued high-grade bonds worth $500 million last week. The single-tranche Baa2/BBB- rated 30-year Sub T-2 bonds were raised at a coupon of 5.3%. The high-grade bonds were issued at a spread of 230 basis points over similar-maturity Treasuries.

Details of Stifel Financial Corporation’s issue

Stifel Financial Corporation (SY) is a full-service brokerage and investment banking firm. It issued $300 million in high-grade bonds last week. The single-tranche five-year issue was rated BBB- and was raised at a coupon of 3.5%. The high-grade bonds were issued at a spread of 190 basis points over similar-maturity Treasuries.

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