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Who Issued the Most High-Grade Bonds Last Week?

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Deals overview

US financials dominated the primary market for high-grade bonds in the week ended April 15, 2016, making up 64.3%, or $15.3 billion, of total issuance. US corporates issuers made up 28.3% of total issuance, while Yankee issuers made up 7.4% of total issuance.

The week ended April 15 brought the year-to-date (or YTD) issuance of high-grade corporate bonds to $560.5 billion.

Issuances by high-grade corporates form part of mutual funds such as the T. Rowe Price New Income Fund (PRCIX) and the Prudential Total Return Bond Fund Class A (PDBAX).

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Details of Bank of America’s issue

Bank of America (BAC) issued Baa1/BBB+ rated high-grade bonds worth $5.0 billion in three parts on April 14:

  • $500 million in five-year FRNs (floating-rate notes) issued at three-month LIBOR (Intercontinental Exchange London Interbank Offered Rate) plus 142 basis points
  • $2.0 billion in 2.6% five-year notes issued at a spread of 138 bps (basis points) over similar-maturity Treasuries
  • $2.5 billion in 3.5% ten-year bonds issued at a spread of 173 bps over similar-maturity Treasuries

Details of Credit Suisse Group’s issue

Credit Suisse Group, a subsidiary of Credit Suisse (CS), issued Baa3/BBB+ rated high-grade bonds worth $4.5 billion in three parts on April 13:

  • $1.0 billion in five-year FRNs issued at three-month LIBOR plus 229 basis points
  • $1.5 billion in 3.5% five-year bonds issued at a spread of 225 bps over similar-maturity Treasuries
  • $2.0 billion in 4.6% ten-year bonds issued at a spread of 280 bps over similar-maturity Treasuries
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Details of Lowe’s Company’s issue

Lowe’s Company (LOW) issued A3/A- rated high-grade bonds worth $3.3 billion in four parts on April 11:

  • $250 million in three-year FRNs issued at three-month LIBOR plus 24 basis points
  • $350 million in 1.2% three-year notes issued at a spread of 35 bps over similar-maturity Treasuries
  • $1.4 billion in 2.5% ten-year notes issued at a spread of 82 bps over similar-maturity Treasuries
  • $1.4 billion in 3.7% 30-year bonds issued at a spread of 117 bps over similar-maturity Treasuries

Details of Wells Fargo’s issue

Wells Fargo (WFC) issued high-grade bonds worth $3.0 billion on April 15. The single-tranche A2/A rated ten-year issue was raised at a coupon of 3.0%. The high-grade bonds were issued at a spread of 130 bps over similar-maturity Treasuries.

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

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