uploads///Total IG Bond Issuance in WE Jan

Barclays Tops the List of High-Grade Bond Issuers

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Jan. 14 2016, Updated 6:07 a.m. ET

Deals overview

US issuers were the biggest issuers of high-grade bonds in the week ended January 8, making up 33.7%, or $10.0 billion, of all issues. US financials and US corporates made up 31.0% and 30.2%, respectively, of all issues. Meanwhile, SSA (sovereign, supranational, and agency) issuers issued $1.5 billion of high-grade bonds last week. The week ended January 8 brought the year-to-date issuance of high-grade corporate bonds to $29.7 billion.

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 Barclays’ issue

Barclays (BCS) is an international financial services provider engaged in personal, corporate, and investment banking, credit cards, and wealth management. It issued high-grade bonds rated as Baa3/BBB worth $4.0 billion in two parts on January 5:

  • $1.5 billion in 3.3% five-year notes issued at a spread of 155 basis points over similar-maturity Treasuries
  • $2.5 billion in 4.4% ten-year notes issued at a spread of 220 basis points over similar-maturity Treasuries

Details of National Australia Bank’s issue

National Australia Bank provides personal banking and business banking services, primarily in Australia and New Zealand. It issued high-grade bonds rated as Aa2/AA- worth $3.5 billion in four parts on January 6:

  • $500 million in three-year FRNs (floating-rate notes) issued at three-month LIBOR (Intercontinental Exchange London Interbank Offered Rate) + 78 basis points
  • $1.3 billion in 2.0% three-year notes at a spread of 85 basis points over similar-maturity Treasuries
  • $1.0 billion in 2.6% five-year notes issued at a spread of 105 basis points over similar-maturity Treasuries
  • $750 million in 3.4% ten-year notes at a spread of 130 basis points over similar-maturity Treasuries
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Details of The Walt Disney Company’s issue

The Walt Disney Company (DIS) issued high-grade bonds rated as A2/A worth $3.0 billion on January 5 in five parts:

  • $400 million in three-year FRNs issued at three-month LIBOR + 32 basis points
  • $350 million in 1.7% three-year notes at a spread of 40 basis points over similar-maturity Treasuries
  • $750 million in 2.3% five-year notes at a spread of 60 basis points over similar-maturity Treasuries
  • $1.0 billion in 3.0% ten-year notes issued at a spread of 80 basis points over similar-maturity Treasuries
  • $500 million in 4.1% 30-year on-tap notes at a spread of 105 basis points over similar-maturity Treasuries

Details of Ford Motor Credit Company’s issue

Ford Motor Credit Company issued high-grade bonds rated as Baa3/BBB- worth $2.8 billion on January 5 in three parts:

  • $350 million in three-year FRNs issued at three-month LIBOR + 158 basis points
  • $1.2 billion in 2.9% three-year notes at a spread of 165 basis points over similar-maturity Treasuries
  • $1.2 billion in 4.4% ten-year notes at a spread of 215 basis points over similar-maturity Treasuries

Details of Citigroup’s issue

Citigroup (C) issued high-grade bonds worth $2.0 billion on January 5. The single-tranche ten-year issue, rated as Baa1/BBB+, was raised at a coupon of 3.7%. The high-grade bonds were issued at a spread of 148 basis points over similar-maturity Treasuries. In the next article, we’ll look at investment-grade bond fund flows.

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