5 Apr

UBS Group Funding 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 ended April 1, making up 41.9%, or $7.7 billion, of all issues. US corporate issuers made up 37.7% of all issues while Yankee issuers made up 20.4% of total issuance.

The week ended April 1 brought the year-to-date issuance of high-grade corporate bonds to $457.5 billion.

UBS Group Funding Issued the Most High-Grade Bonds Last Week

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 UBS Group Funding (Jersey) Limited’s issue

UBS Group Funding (Jersey), a subsidiary of UBS Group AG (UBS), issued BBB+ rated high-grade bonds worth $5.0 billion via three parts on March 29:

  • $1.0 billion in five-year FRNs (floating rate notes) issued at three-month LIBOR + 178 basis points
  • $2.0 billion in 3.0% five-year bonds issued at a spread of 175 basis points over similar-maturity Treasuries
  • $2.0 billion in 4.1% ten-year bonds issued at a spread of 235 basis points over similar-maturity Treasuries

Details of Occidental Petroleum’s issue

Occidental Petroleum (OXY) is engaged in oil and gas exploration and production in the US and the Middle East. It issued A3/A rated high-grade bonds worth $2.8 billion via three parts on March 28:

  • $400 million in 2.6% six-year notes issued at a spread of 125 basis points over similar-maturity Treasuries
  • $1.2 billion in 3.4% ten-year notes issued at a spread of 155 basis points over similar-maturity Treasuries
  • $1.2 billion in 4.4% 30-year bonds issued at a spread of 180 basis points over similar-maturity Treasuries

Details of Toronto-Dominion Bank’s issue

Toronto-Dominion Bank (TD) offers a full range of financial products and services. It issued Aa1/AA- rated high-grade bonds worth $2.3 billion via two parts on March 31:

  • $500 million in five-year FRNs (floating rate notes) issued at three-month LIBOR + 100 basis points
  • $1.8 billion in 2.1% five-year notes issued at a spread of 97 basis points over similar-maturity Treasuries

Details of Omnicom Group’s issue

Omnicom Group (OMC) is a global marketing and corporate communications company. It issued Baa1/BBB+ rated high-grade bonds worth $1.9 billion via two parts on March 28:

  • $500 million in 2.3% three-year notes issued at a spread of 130 basis points over similar-maturity Treasuries
  • $1.4 billion in 3.6% ten-year on-tap notes issued at a spread of 175 basis points over similar-maturity Treasuries

In the next article, we will look at investment-grade bond fund flows.

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