uploads/2015/12/US-Investment-Grade-Bond-Market-Issuance-2015-12-221.jpg

No Investment-Grade Corporate Bond Issuance due to Rate Hike

By

Updated

Deals and volumes of investment-grade corporate bonds

There was no issuance of investment-grade corporate bonds in the primary market in the week to December 18, 2015. With the rise in interest rates, the investment-grade issuers became worried that the credit risk and default risk may rise. In the previous week, investment-grade corporate bonds worth $32.2 billion were issued. The number of issuers went down to zero from 11 in the previous week.

Last week, yields on investment-grade corporate bonds rose. And as a result, weekly returns of the American Century Diversified Bond Fund – Class A (ABNDX) and the Strategic Advisers Core Income Fund (FPCIX) were down by 0.5% and 0.3%, respectively.

Article continues below advertisement

No issuers in the week ended December 18

There was no issuance in the high grade bond market last week. At the end of the week ended December 18, the year-to-date issuance of high grade corporate bonds stood at $1.5 trillion.

In the previous week, Visa (V) had emerged as the biggest issuer, having issued $16.0 billion worth of high grade bonds. Meanwhile, Schlumberger Holding (SLB) had issued high grade bonds worth $6.0 billion. Credit Suisse Group Funding (Guernsey) Limited, a subsidiary of Credit Suisse AG (CS), and Toronto-Dominion Bank (TD) each had issued high grade bonds worth $2.0 billion. Plus, Marathon Petroleum (MPC) had issued high grade bonds worth $1.5 billion in the previous week.

In the next part of the series, we’ll look at Lipper fund flows data.

Advertisement

More From Market Realist