15 Apr

BMW US Capital Issued the Most High-Grade Bonds Last Week

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

Deals Overview

US financials dominated the primary market for high-grade bonds in the week ending April 8. They accounted for 53.0%, or $13.4 billion, of all the issues. US corporates issuers made up 38.1% of all the issues. Yankee bond issuers made up 8.9% of the total issuance.

The week ending April 8 brought the year-to-date issuance of high-grade corporate bonds to $482.8 billion.

BMW US Capital Issued the Most High-Grade Bonds Last Week

The issuances by high-grade corporates form part of mutual funds like the T. Rowe Price New Income Fund (PRCIX) and the Prudential Total Return Bond Fund – Class A (PDBAX).

Details of Mizuho Financial Group’s issue

Mizuho Financial Group (MFG) is a bank holding company. It manages and engages in ancillary operations related to the management of its legally owned subsidiaries as defined by the Japanese Banking Act. It issued A1/A- rated high-grade bonds worth $4.0 billion though three parts on April 5:

  • $500 million in five-year FRNs (floating rate notes) issued at three-month LIBOR + 148 basis points
  • $1.75 billion in 2.6% five-year notes issued at a spread of 145 basis points over similar-maturity Treasuries
  • $1.75 billion in 3.5% ten-year bonds issued at a spread of 175 basis points over similar-maturity Treasuries

Details of BMW US Capital LLC’s issue

BMW US Capital, LLC is a subsidiary of BMW AG. It issued A2/A+ rated high-grade bonds worth $4.0 billion through three parts on April 4:

  • $1.5 billion in 1.5% three-year bonds issued at a spread of 65 basis points over similar-maturity Treasuries
  • $1.5 billion in 2.0% five-year bonds issued at a spread of 85 basis points over similar-maturity Treasuries
  • $1.0 billion in 2.8% ten-year bonds issued at a spread of 105 basis points over similar-maturity Treasuries

Details of Toyota Motor Credit Corporation’s issue

Toyota Motor Credit Corporation is a financial subsidiary of Toyota Motor (TM). It issued Aa3/AA- rated high-grade bonds worth $2.5 billion through three parts on April 5:

  • $350 million in two-year FRNs issued at three-month LIBOR + 38 basis points
  • $900 million in 1.2% two-year notes issued at a spread of 50 basis points over similar-maturity Treasuries
  • $1.25 billion in 1.9% five-year bonds issued at a spread of 77 basis points over similar-maturity Treasuries

Details of Target’s issue

Target (TGT) is a discount retailer. It issued A2/A rated high-grade bonds worth $2.0 billion through two parts on April 4:

  • $1.0 billion in 2.5% ten-year on-tap notes issued at a spread of 72 basis points over similar-maturity Treasuries
  • $1.0 billion in 3.6% 30-year bonds issued at a spread of 105 basis points over similar-maturity Treasuries

In the next part, we’ll look at investment-grade bond fund flows.

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