9 Feb

Issuance Matters: More on Investment-Grade Corporate Bonds from the Week Ending February 5

WRITTEN BY Lynn Noah FEATURED IN Company News, Insights, & Analysis

Deals and volumes of investment-grade corporate bonds

Investment-grade corporate bonds worth ~$12.2 billion were issued in the primary market in the week ending February 5, 2016. This was lower than the $23.1 billion we saw issued the previous week, and the number of issuers fell to 12 from 14 the previous week.

Issuance Matters: More on Investment-Grade Corporate Bonds from the Week Ending February 5

However, last week, the yield on investment-grade corporate bonds nudged up. As a result, the weekly returns of the T. Rowe Price New Income Fund (PRCIX) and the Janus Flexible Bond Fund Class A (JDFAX) were flat.

Major Issuers

Home Depot (HD), National Rural Utilities Cooperative Finance Corporation, Starbucks (SBUX), and Praxair (PX) were among large issuers of investment-grade bonds in the week ending February 5.

Issuance by quality and maturity

Fixed-rate issues formed 94.3% of the total issuance while floating-rate issues worth $0.7 billion were raised in the week ending February 5. As for the credit ratings of issues, AAA-rated issuers were the most prolific, making up 46.6%, or $5.7 billion, of the total issuance. These were followed by A-rated issuers, which formed 40.7% of the week’s issuance. BBB-rated papers formed 9.4% of the total issuance.

In terms of maturity, the largest chunk of issuance, making up 38.9% of all issues, was in the five-year maturity category. This was followed by the three-year maturity category, which commanded 35.6% of the total issuance, and the ten-year maturity category, which made up 12.9% of the total issuance that week.

Meanwhile, long-term maturity categories, such as the 30-year, made up 2.9% of the total issuance, while >30-year category did not see any issuance for the fourth consecutive week. Perpetuals made up 1.2% of total issuance last week.

In the next part of this series, we’ll highlight the major deals from the week ending February 5, including pricing, credit rating, and yields.

Latest articles

Monster Beverage (MNST) stock was down 1.6% as of 2:47 PM EDT on March 20.

Earlier today, the second-largest US automaker by 2018 sales volume, Ford Motor Company (F), revealed its plan to invest $850 million in its Flat Rock assembly plant through 2023.

Mizuho downgraded Yum! Brands (YUM) from “neutral” to “underperform” while keeping its 12-month price unchanged at $84, which represents a fall of 15.4% from its March 19 closing price of $99.20.

20 Mar

Why Verizon Sought to Lead 5G Rollout

WRITTEN BY Rachel Gunter

According to Verizon, its mobile 5G plans will cost $10 more than its current 4G plans.

As of March 19, Dunkin’ Brands (DNKN) was trading at $71.55, which represents a rise of 3.9% since the announcement of its fourth-quarter earnings on February 7.

Suncor Energy's shareholder returns have grown consistently over the past few years. The company hasn't forgotten its commitment to growth.