uploads///US Investment Grade Bond Market Issuance

Investment-Grade Corporate Bond Issuance Fell Last Week

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Apr. 26 2016, Updated 4:28 p.m. ET

Deals and volumes of investment-grade corporate bonds

Investment-grade corporate bonds worth $17.7 billion were issued in the primary market in the week ended April 22, 2016. High-grade issuance stood at $23.7 billion in the previous week. The number of issuers fell to 14 from 15 in the previous week.

Last week, yields on investment-grade corporate bonds rose. As a result, the weekly returns of the MFS Total Return Bond Fund Class A (MRBFX), the Janus Flexible Bond Fund Class A (JDFAX), and the Vanguard Short-Term Corporate Bond ETF (VCSH) rose.

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Major issuers

Goldman Sachs (GS), Morgan Stanley (MS), Mitsubishi UFJ Financial Group (MTU), and US Bancorp (USB) were among the major issuers of investment-grade bonds in the week ended April 22, 2016.

Issuance by quality and maturity

Fixed-rate issues formed 79.4% of total issuance last week. Floating-rate issues worth $3.7 billion were issued last week.

Looking at the credit ratings of issues, BBB rated issuers were the most prolific. They made up 61.0%, or $10.8 billion, of total issuance. They were followed by A rated issuers, which formed 24.9% of total issuance. Meanwhile, AA rated papers formed 11.3% of total issuance.

In terms of maturity, the largest chunk of issuance, making up 3.1% of all issues, was in the five-year maturity category. It was followed by the ten-year maturity category, which commanded 31.4% of total issuance. The three-year maturity category made up 15.5% of total issuance last week.

Long-term maturity categories such as the 30-year and over 30-year category didn’t see any issuance last week. Meanwhile, perpetuals didn’t see any issuance for the third consecutive week.

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

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