uploads///US Investment Grade Bond Market Issuance

Investment-Grade Corporate Bonds’ Issuance Rose Last Week


Aug. 5 2016, Updated 9:05 a.m. ET

Deals and volumes

High-grade bond issuance rose last week as the foreign money kept flowing in the US bond market. Investment-grade corporate bonds worth $32.7 billion were issued in the primary market in the week to July 29, 2016. High-grade issuance stood at $30.3 billion in the previous week. The number of issuers jumped from 12 in the previous week to 22 in the week ending July 29.

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

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Major issuers

Apple (AAPL), Verizon Communications (VZ), Citigroup (C), and Royal Bank of Canada (RY) were among the large issuers of investment-grade bonds in the week to July 29.

Issuance by quality and maturity

Fixed-rate issues formed 93.6% of the total issuance, while floating-rate issues worth $2.0 billion were issued last week.

Looking at the credit ratings of issues, BBB rated issuers were the most prolific. They made up 45.9%, or $15.0 billion, of the total issuance. They were followed by AA rated issuers—36.1% of the week’s issuance. Meanwhile, A rated papers formed 12.8% of the total issuance.

In terms of maturity, the three-year and ten-year maturity categories commanded the largest chunk of issuance—28.1% each of all the issues. It was followed by the five-year maturity category—20.9% of the total issuance.

The long-term maturity category such as the 30-year made up 16.4% of the total issuance. Meanwhile, the greater than 30-year category didn’t see any issuance last week. The perpetual category made up 4.9% of the total issuance.

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


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