The week ending August 15, high-grade corporate bond (AGG) issuance was subdued despite the favorable market conditions. Issuance volumes plunged to 33% over the previous week. In the week ending August 15, more than 17 corporate investment-grade bond (LQD) transactions issued $16.7 billion.
Normally, issuance has a July to August seasonal slowdown. Also, primary market issues surged in the previous week. Further corporate borrowers emerged of the earnings blackout period, spiking issuance to $25 billion within the week that ended on August 8.
Ten percent of the issuance was accounted for the floating rate note, issuing the balance on a fixed-rate. A total of four issuers with floating rate notes hit the market for $1.6 billion total. Interest rates are expected to increase by 2015, but most borrowers intend to lock in interest rates through fixed-rate issues.
The most common issuance by quality is the A-rated borrowers, accounting for a total of 51% in the week that ended August 15, while the most popular issuance by maturity is the 5-year maturities, accounting for a total of 38% issuance.