Investment-Grade Corporate Bond Issuance Slows ahead of Labor Day

Deals and volumes of investment-grade corporate bonds

Investment-grade corporate bonds worth $11.8 billion were issued in the primary market in the week of August 19, 2016. High-grade issuance was $45.0 billion in the previous week. The number of issuers tanked from 31 in the previous week to 14 in the week ended August 19.

So far in August, ~$95.5 billion worth of new high-grade issuance has been made. Issuance has slowed further leading up to the Labor Day long weekend.

Investment-Grade Corporate Bond Issuance Slows ahead of Labor Day

Funds such as the iShares Intermediate Credit Bond ETF (CIU) and the Vanguard Intermediate-Term Corporate Bond ETF (VCIT) can help you to invest in high-grade bonds.

Major issuers

Standard Chartered (SCBFF), Citigroup (C), Société Generale Bank, Entergy (ETR), and UDR (UDR) were among the largest issuers of investment-grade bonds in the week ended August 19, 2016.

Issuance by quality and maturity

Fixed-rate issuances formed 76.6% of total issuances, while floating-rate issuances worth $2.8 billion were issued last week.

Looking at the credit ratings of these issuances, BBB-rated issuers were the most prolific. They made up 70.1%—or $8.3 billion—of all issuances. They were followed by AAA-rated issuers, which formed 17.0% of the week’s total issuances. Meanwhile, A-rated papers formed 13.0% of all issuances.

In terms of maturity, the ten-year maturity category commanded the largest chunk of issuance, making up 33.5% each of all issuances. It was followed by the 7-year maturity category, which commanded 21.2% of all issuances, while the 3-year maturity category made up 19.1% of all issuances.

The long-term maturity category, including 30-year maturity issuances, made up 5.7% of all issuances. Meanwhile, the over 30-year category didn’t see any issuances, and perpetual categories made up 3.4% of all issuances.

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