Yields on high-grade corporate bonds, as represented by the BofA Merrill Lynch US Corporate Master Effective Yield, have fallen since the Fed released its March policy statement.
With the Christmas holiday upon them and New Year’s day around the corner, investment-grade corporate bond issuers stayed away from the primary market.
Investment-grade corporate bonds worth $32.8 billion were issued in the primary market in the week to November 20, 2015. They fell 0.4% from the previous week.
Halliburton (HAL) issued high-grade bonds worth $7.5 billion via five parts. Halliburton will use the proceeds to fund its acquisition of Baker Hughes (BHI).
US corporates were the biggest issuers of high-grade bonds in the week ending October 30. They accounted for 67.1%, or $25.7 billion, of all the issues.
US financials were the biggest issuers of high-grade bonds in the week ended October 23, 2015, making up 31.4%, or $8.0 billion, of all issues. Citigroup (C) issued high-grade bonds worth $4.5 billion.
Mutual funds currently own ~20% of outstanding corporate bonds—a gaining trend. Bond mutual funds thus have an increasing role in credit intermediation.
Stanley Fischer expressed his views on the US economy at the G30 Annual International Banking Seminar on October 11. This came three days after the dovish minutes of the FOMC September meeting.
