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.
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.
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.
Investment-grade bond funds saw net outflows of ~$1.5 billion during the week ending February 5 compared to ~$1.2 billion during the week ending January 29.
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