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Three in a row for strong bond volume

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September 30, 2013 – Comments (2) | RELATED TICKERS: GM , ARCO , BBL

GM wasn't the biggest bond issuer last week, that was BHP Billiton.  I didn't think it was the most interesting; that was Arcos Dorados.  But, I thought it was the most interesting of the $ billion + crowd.

GM says taking down higher rate securities currently held by US and Canadian unions will add $0.11 per share to 2014 earnings.  My numbers put the interest savings at just under ten cents per year, but I could be missing something.  In any event, the borrow and buy back deals look like a good deal for GM shareholders.

Arcos Dorados deal was a two-fer.  The company made a tender offer for existing, higher rate paper offering either a cash buy or a swap for new notes.  That made for a two-part new note issue.  One part selling notes to raise cash for the buy back and a second issue of the new paper to swap for the higher rate notes.  I don't think Arcos is saving much with the deal, but it is extending maturity.

Fool on!  Russ

2 Comments – Post Your Own

#1) On September 30, 2013 at 6:54 PM, ElCid16 (96.25) wrote:

Russ - it seems that you have a pretty good handle on weekly debt issuances among big companies.  Quick question: over the past several years have weekly debt issuances been pretty stable or are there any underlying trends?  Any insight on where I could find that data?

Thanks. 

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#2) On September 30, 2013 at 8:32 PM, rd80 (98.32) wrote:

Hi ElCid,

Thanks for the question.  I don't think there's been a big change over the past few years, but I've only been following bond issues for a couple of years and this is the first year I've kept good week-to-week records.

Average weekly issuance this year is around $30 billion, but that can swing a lot week to week.  I don't have an average for 2012, but suspect it's pretty close to 30.

My primary source for starting an article is Reuters.  They publish a weekly list of new issues.  Best way to find it is to google "US Forward Calendar" and pick the most recent hit from reuters.com - they update it nearly every day.  It's not perfect, but is the best listing I'm aware of - at least the best free listing.  From there, it's sifting through press releases and SEC filings to get details.

Barron's also publishes weekly bond stats in their Market Lab From the link, click Weekly Bond Statistics.  I'm pretty sure there's no subscription needed for Market Lab stuff.  That won't agree with Reuters numbers - I don't think Barron's includes junk bonds or quasi-government stuff like export-import banks that are in Reuters' list.

I'm sure there are other sources, those are just the two I'm most familiar with.

Not sure it was a trend, but bond issues fell dramatically in late May following Fed taper talk and seem to have picked back up starting in early Sep when tapering was pushed out to who knows when.

Hope that helps.

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