Deals and volumes: Investment-grade corporate bonds
Investment-grade corporate bond issuance rose by 8% year-over-year and came in at $1.51 trillion in 2015. The number of issuers stood at 967 issuing bonds in 1,666 tranches.
March saw the highest issuance of the year while December recorded the lowest issuance in the primary market. December saw no issuance of investment-grade corporate bonds for three successive weeks due to the interest rate hike and the holidays.
The Wasatch-1st Source Income Fund (FMEQX) was down by 0.9% while the Janus Flexible Bond Fund – Class A (JDFAX) fell 2.5% year-over-year in 2015.
Major issuers of 2015
In 2015, Actavis (ACT), AT&T (T), AbbVie (ABBV), Visa (V), CVS Health (CVS), Microsoft (MSFT), and Shell International—a subsidiary of oil and gas major Royal Dutch Shell (RDS.A)—were among the biggest issuers of investment-grade bonds.
Issuance by quality and maturity
Fixed-rate issues formed 93.7% of the total issuance. Floating-rate issues worth $94.9 billion were raised in 2015.
BBB rated issuers were the most prolific of the bunch. They made up 41.7%, or $629.21 billion, of the total issuance. They were followed by A rated issuers, which formed 34.2% of the month’s issuance. AA rated papers formed 12.1% of the total issuance.
In terms of maturity, the largest chunk of issuance—making up 27.2% of all issues—was in the ten-year maturity category. It was followed by the five-year maturity category, which commanded 25.9% of the total issuance. The three-year maturity category made up 17.8% of the total issuance.
The long-term maturity category—30-year, >30-year, and perpetuals—made up 14.5%, 1.5%, and 2.9% of the total issuance in 2015, respectively.
In the next part of this series, we’ll highlight the major deals of 2015—including pricing, credit rating, and yields.