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Which Company Issued the Most High-Grade Bonds in 1Q16?

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Deals overview

US corporates dominated the primary market for high-grade bonds in 1Q16 ended March 31, 2016. US corporates made up 32.2%, or $147.7 billion, of all issues. Yankee issuers made up 29.2% of all issues. Sovereigns, Agencies, and Supranationals (or SAS) issuers made up 17.1% of total issuances.

1Q16 brought the year-to-date issuance of high-grade corporate bonds to $458.3 billion, a rise of 2% compared to 1Q15.

Issuances by high-grade corporates form part of mutual funds such as the Hartford Total Return Bond HLS Fund Class IA (HIABX) and the Prudential Total Return Bond Fund Class A (PDBAX).

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Highlights of major issues in 1Q16

Anheuser-Busch InBev (BUD) issued high-grade bonds worth $46.0 billion on January 13. This was the second-largest high-grade bond issuance on record. BUD intended to use the proceeds of the issuance to back its acquisition of SAB Miller (SBMRY).

Apple (AAPL) issued high-grade bonds worth $12.0 billion on February 16. The company intended to use the proceeds of the loan for share buybacks and dividend payments.

ExxonMobil (XOM) issued high-grade bonds worth $12.0 billion on February 29. The company intended to use the proceeds of the loan for refinancing purposes.

Berkshire Hathaway (BRK.A) and its wholly-owned finance subsidiary Berkshire Hathaway Finance issued high-grade bonds worth $9.0 billion on March 8. The company intended to use the proceeds to pay down a $10 billion loan used to finance its purchase of Precision Castparts and to refinance $300 million worth of 2.2% Senior Notes that matured and were repaid on February 11.

Newell Rubbermaid (NWL) is a global marketer of consumer and commercial products. It issued high-grade bonds worth $8.0 billion on March 18. Newell Rubbermaid planned to use the net proceeds of the offering together with other sources of funds to finance the cash portion of the merger consideration for its pending acquisition of Jarden (JAH). It also planned to use the proceeds to refinance outstanding Jarden debt and to pay fees and expenses associated with the pending acquisition.

In the next article, we’ll analyze investment-grade bond fund flows.

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