uploads///US Investment Grade Bond Market Issuance

No Investment-Grade Corporate Bond Issuance for 3 Weeks in December

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Jan. 5 2016, Published 10:26 a.m. ET

Deals and volumes of investment-grade corporate bonds

Investment-grade corporate bonds worth $57.1 billion were issued in the primary market in December 2015. The investment-grade corporate bond issuance fell by 46.9% from the previous month. The number of issuers fell to 55 in December from 93 in November.

In December, there weren’t any investment-grade corporate bonds issued for three consecutive weeks due to the interest rate hike, festivities, and holidays.

The American Century Diversified Bond Fund – Class A (ADFAX) fell by 1.2% in December from a month ago.

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Major Issuers

Visa (V), Schlumberger (SLB), McDonald’s (MCD), Credit Suisse Group Funding—a subsidiary of Credit Suisse AG (CS), and Toronto-Dominion Bank (TD) were among the biggest issuers of investment-grade bonds in December 2015.

Issuance by quality and maturity

Fixed-rate issues formed 96.7% of the total issuance. There were floating-rate issues worth $1.9 billion raised in December.

Looking at the credit ratings of issues, A rated issuers were the most prolific. They accounted for 52.4%, or $29.9 billion, of the total issuance. BBB rated issuers were next. They formed 37.9% of the month’s issuance. AA rated papers formed 8.3% of the total issuance.

In terms of maturity, the largest chunk of issuance was the ten-year maturity category. It accounted for 28.3% of all the issues. It was followed by the five-year maturity category. It accounted for 22.5% of the total issuance. The three-year maturity category accounted for 21.3% of the total issuance.

The long-term maturity category, like the 30-year, accounted for 17.9% of the total issuance. Meanwhile, the greater than 30-year and perpetuals didn’t see any issuance in December.

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

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