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Apple Issued the Most High-Grade Bonds Last Wrek

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Deals overview

US corporates dominated the primary market for high-grade bonds in the week ending July 29. They accounted for 42.7%, or $14.0 billion, of all the issues. US financials made up 22.5%, while Sovereigns, Agencies, and Supranationals issuers made up the remaining 14.3% of the total issuance.

The week ending July 29 brought the year-to-date issuance of high-grade corporate bonds to $1.0 trillion.

Issuances by high-grade corporates form part of the Vanguard Total Bond Market Index Fund (BND), the iShares 1-3 Year Credit Bond Fund (CSJ), and the SPDR Barclays Short Term Corporate Bond ETF (SCPB).

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Details of Apple’s issue

Apple (AAPL) issued Aa1/AA+ rated high-grade bonds worth $7.0 billion through five parts on July 28:

  • $350 million in three-year FRNs (floating rate notes) issued at LIBOR + 14 basis points
  • $1.15 billion in 1.1% three-year notes issued at a spread of 32 basis points over similar-maturity Treasuries
  • $1.25 billion in 1.6% five-year notes issued at a spread of 50 basis points over similar-maturity Treasuries
  • $2.25 billion in 2.5% ten-year notes issued at a spread of 98 basis points over similar-maturity Treasuries
  • $2.0 billion in 3.9% 30-year bonds issued at a spread of 163 basis points over similar-maturity Treasuries

Details of Verizon Communications’ issue

Verizon Communications (VZ) issued Baa1/BBB+ high-grade bonds worth $6.15 billion on July 27 through five parts:

  • $400 million in three-year FRNs issued at LIBOR + 37 basis points
  • $1.0 billion in 1.4% three-year notes issued at a spread of 55 basis points over similar-maturity Treasuries
  • $1.0 billion in 1.8% five-year notes issued at a spread of 75 basis points over similar-maturity Treasuries
  • $2.25 billion in 2.6% ten-year notes issued at a spread of 115 basis points over similar-maturity Treasuries
  • $1.5 billion in 4.1% 30-year bonds issued at a spread of 190 basis points over similar-maturity Treasuries
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Details of Citigroup’s issue

Citigroup (C) issued Baa1/BBB+ high-grade bonds worth $2.5 billion on July 26 through two parts:

  • $750 million in five-year FRNs issued at LIBOR + 119 basis points
  • $1.75 billion in 2.4% five-year notes issued at a spread of 123 basis points over similar-maturity Treasuries

Details of Royal Bank of Canada’s issue

Royal Bank of Canada (RY) issued Aa3/AA- high-grade bonds worth $1.8 billion on July 25 through two parts:

  • $300 million in three-year FRNs issued at LIBOR + 48 basis points
  • $1.5 billion in 1.5% three-year notes issued at a spread of 68 basis points over similar-maturity Treasuries

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

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