uploads///US Investment Grade Bond Market Issuance

Issuances of Investment-Grade Corporate Bonds Fell in the Week Ending January 22


Jan. 26 2016, Updated 4:34 p.m. ET

Deals and volumes of investment-grade corporate bonds

Investment-grade corporate bonds worth roughly $28.8 billion were issued on the primary market in the week ending January 22, 2016. During the previous week, bonds worth nearly $62.5 billion were issued. The number of issuers went down to 13 from 16 in the previous week.

Meanwhile, yields on investment-grade corporate bonds rose last week, and as a result, the weekly returns of the Putnam Income Fund Class A (PINCX) and the Nuveen Short-Term Bond Fund Class A (FALTX) were down by 0.3% and 0.1%, respectively.

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Major bond issuers in the week ending January 22

Morgan Stanley (MS), Wells Fargo & Company (WFC), Royal Bank of Canada (RY), and TransCanada Pipelines, a limited partnership firm sponsored by TransCanada Corporation (TRP), were among the other biggest issuers of investment-grade bonds in the week ending January 22.

A breakdown of issuance by quality

Fixed-rate issues made up 82.8% of the total investment-grade bond issues last week. Floating-rate issues worth $4.95 billion were raised during the same week.

In terms of the credit ratings of issues, AA-rated issuers were the most prolific during that week, making up 35.6%, or nearly $10.3 billion, of total issues of investment-grade bonds. These were followed by AAA-rated issuers, which made up 26.9% of the week’s issuance. BBB-rated papers constituted 26.0% of the total issues of investment-grade bonds.

A breakdown of issuance by maturity

In terms of maturity, the largest chunk of issuance, making up 52.4% of all issues, was in the three-year maturity category. This was followed by the ten-year maturity category, which commanded 22.0% of the total issuance. The five-year maturity category did not see any issuance in the week ending January 22.

Long-term maturity categories including the 30-year and >30-year did not see any issues last week. Meanwhile, perpetuals made up 6.5% of total issues for the same week.

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


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