uploads///US Investment Grade Bond Market Issuance

$62.47 Billion in Investment-Grade Corporate Bonds Issued Last Week

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Jan. 19 2016, Updated 2:32 p.m. ET

Deals and volumes of investment-grade corporate bonds

Investment-grade corporate bonds worth $62.47 billion were issued in the primary market in the week ended January 15, 2016. Investment-grade corporate bonds worth $29.68 billion were issued in the previous week. However, the number of issuers fell from 18 to 16 in the previous week.

Last week, yields on investment-grade corporate bonds rose slightly. As a result, weekly returns of the Putnam Income Fund – Class A (PINCX) and the Nuveen Short-Term Bond Fund – Class A (FALTX) were down by 0.73% and 0.17%, respectively.

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Major issuers

Issuing $46.0 billion in bonds, Anheuser-Busch InBev (BUD) became the second-largest issuer of high-grade bonds ever. Verizon (VZ) had issued high-grade bonds worth $49.0 billion in 2013 and became the largest issuer of investment-grade bonds in the history of the high-grade bond market.

Macquarie Bank Limited, Toronto-Dominion Bank (TD), and Royal Bank of Canada (RY) were among the other major issuers of investment-grade bonds in the week ended January 15.

Issuance by quality and maturity

Fixed-rate issues formed 96.8% of the total issuance last week. Floating-rate issues worth $2.0 billion were raised last week.

Looking at the credit ratings of these issues, A-rated issuers were the most prolific. They made up 92.8%, or $55.56 billion, of the total issuance. They were followed by AA-rated issuers, which formed 5.2% of the week’s issuance. BBB-rated papers formed 2.0% of the total issuance.

In terms of maturity, the largest issuance, making up 32.5% of all issues, was in the ten-year maturity category. It was followed by the five-year maturity category, which commanded 21.7% of the total issuance. The three-year maturity category made up 15.5% of the total issuance.

Long-term maturity categories such as the 30-year made up 20.0% of the total issuance. However, the 30-year+ and perpetuals categories did not see any issuances in the 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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