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Who Issued the Most High-Grade Bonds Last Week?

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Deals overview

US corporates dominated the primary market for high-grade bonds in the week ended May 6, 2016, making up 36.9%, or $10.8 billion, of all issues. Yankee bond issuers made up 34.9% of all issues, while US financials made up 21.9% of total issuance.

The week ended May 6 brought the year-to-date issuance of high-grade corporate bonds to $622.8 billion.

Issuances by high-grade corporates form part of mutual funds and ETFs such as 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).

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Details of Shell International Finance’s issue

Shell International Finance is a financial subsidiary of Royal Dutch Shell (RDS.A). It issued Aa2/A+ rated high-grade bonds worth $7.3 billion via four parts on May 5, 2016:

  • $1.8 billion in 1.4% three-year notes issued at a spread of 60 bps (basis points) over similar-maturity Treasuries
  • $1.5 billion in 1.9% five-year notes issued at a spread of 80 bps over similar-maturity Treasuries
  • $1.8 billion in 2.9% ten-year notes issued at a spread of 118 bps over similar-maturity Treasuries
  • $2.3 billion in 4.0% 30-year bonds issued at a spread of 152 bps over similar-maturity Treasuries

Details of AT&T’s issue

AT&T (T) re-opened Baa1/BBB+ rated high-grade bonds worth $4.0 billion on May 6 via five parts:

  • $750 million in 2.3% three-year on-tap notes issued at a spread of 73 bps over similar-maturity Treasuries
  • $750 million in 2.8% five-year on-tap notes issued at a spread of 103 bps over similar-maturity Treasuries
  • $1.1 billion in 3.6% seven-year on-tap notes issued at a spread of 135 bps over similar-maturity Treasuries
  • $900 million in 4.1% ten-year on-tap notes issued at a spread of 150 bps over similar-maturity Treasuries
  • $500 million in 4.8% 28-year on-tap bonds issued at a spread of 210 bps over similar-maturity Treasuries
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Details of General Motors Financial Company’s issue

General Motors Financial Company, a financial services arm of General Motors (GM), issued Ba1/BBB- rated high-grade bonds worth $3.0 billion on May 4 via three parts:

  • $400 million in three-year FRNs (floating rate notes) issued at three-month LIBOR (Intercontinental Exchange London Interbank Offered Rate) plus 145 bps
  • $1.4 billion in 2.4% three-year notes issued at a spread of 155 bps over similar-maturity Treasuries
  • $1.2 billion in 3.7% seven-year notes issued at a spread of 220 bps over similar-maturity Treasuries

Details of BB&T Corporation’s issue

BB&T Corporation (BBT) issued high-grade bonds worth $3.0 billion on May 5 via three parts:

  • $250 million in A1/A rated three-year FRNs (floating rate notes) issued at three-month LIBOR plus 53 bps
  • $1.5 billion in A1/A rated 1.5% three-year notes issued at a spread of 62.5 bps over similar-maturity Treasuries
  • $1.3 billion in A2/A rated 2.1% five-year notes issued at a spread of 87.5 bps over similar-maturity Treasuries

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

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