Who Had the Largest High-Grade Bond Issuance Last Week?

Emerging markets dominated the primary market for high-grade bonds in the week ending April 29, making up 47.4%, or $12.8 billion, of all issues. US financial issuers accounted for 25.7% of all issues, while US corporate issuers accounted for 17.6% of total issuance. Last week brought the year-to-date issuance of high-grade corporate bonds to $593.5 billion.

Issuances by high-grade corporates form part of mutual funds and ETFs like the Strategic Advisers Core Income Fund (FPCIX), the Prudential Total Return Bond Fund Class A (PDBAX), and the iShares 1–3 Year Credit Bond ETF (CSJ).

Sinopec Group Overseas Development is a debt-issuing subsidiary of China Petroleum & Chemical Corporation (SNP). It issued Aa3/A+ rated high-grade bonds worth $3.0 billion via four parts on April 25:

• $1.0 billion in 2.13% three-year notes issued at a spread of 120 basis points over similar-maturity Treasuries
• $900 million in 2.75% five-year notes issued at a spread of 142.5 basis points over similar-maturity Treasuries
• $700 million in 3.5% ten-year notes issued at a spread of 170 basis points over similar-maturity Treasuries
• $400 million in 4.25% 30-year bonds issued at a spread of 153.5 basis points over similar-maturity Treasuries

Ford Motor Credit Company, a financial subsidiary of Ford Motor Company (F), issued Baa2/BBB rated high-grade bonds worth $2.3 billion via two parts on April 29:

• $1.25 billion in 2.02% three-year notes issued at a spread of 110 basis points over similar-maturity Treasuries
• $1.0 billion in 3.10% seven-year notes issued at a spread of 150 basis points over similar-maturity Treasuries

Bank of New York Mellon Corporation (BK) issued A1/A rated high-grade bonds worth $2.0 billion on April 25 via two parts:

• $1.25 billion in 2.05% five-year notes issued at a spread of 70 basis points over similar-maturity Treasuries
• $750 million in 2.8% ten-year notes issued at a spread of 95 basis points over similar-maturity Treasuries

BP Capital Markets, also called BP Capital UK, is a wholly-owned indirect subsidiary of BP Group (BP). It issued A2/A- rated high-grade bonds worth $2.0 billion on April 28 via two parts:

• $750 million in 1.68% three-year notes issued at a spread of 75 basis points over similar-maturity Treasuries
• $1.3 billion in 3.12% ten-year notes issued at a spread of 130 basis points over similar-maturity Treasuries

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