For Corporate Investment Grade Bonds, how do fees vary regarding size and maturity?
Fees do not tend to vary with transaction size and Fees increase with maturity of the bond as average gross fees increase from 0.24% for bonds with maturity of 2 to 4 years to 0.38% for bonds with maturity of 15 to 40 years (Table 6).
Note: The sample included 696 corporate investment grade bond transactions undertaken between January 2014 and May 2015. The sample is split into seven groups based on the distribution of gross fees by maturity:
- shorter than 2 years – 18 transactions;
- 2 to 4 years – 103 transactions,
- 4 to 7 years – 175 transactions,
- 7 to 9 years – 138 transactions,
- 9 to 15 years – 188 transactions,
- 15 to 40 years – 64 transactions,
- more than 40 years – 10 transactions.
The above table does not report results for bonds with maturities below 2 years or more than 40 years due to small samples.
For Corporate Investment Grade Bonds, how do fees vary regarding rating?
Fees increase as bond rating decreases - average gross fees increase
from 0.24% for bonds with an AA rating to 0.44% for BBB bonds (Table 7). Fees
for bonds with similar maturities or rating vary. For example, for AA
corporate bonds fees range between 0.15% and 0.35% (0.20ppt difference)
for the middle 50% of transactions.
Note: The sample included 793 corporate investment grade bond transactions undertaken between January 2014 and May 2015. We split the sample into groups by rating. In the table above, we do not report results for bonds with other ratings due to small samples (fewer than 50 observations) or because bonds were not rated, but these observations are included in the ‘total’. The ratings include ‘+’ and ‘-‘ ratings, for example, an AA bond category includes bonds rated as‘AA, ‘+AA’ and ‘-AA’.
How much UK GBP Corporate IG Debt is currently outstanding?
As of the 1st October 2016, there is just under GBP134bn Corporate IG Debt outstanding. The bulk of this debt is concentrated in the A- to BBB categories. They account for 68% of UK Corp IG Debt.
The results were obtained via the CMD Portal Data Sheet Search tool. To re-produce the data (which is downloadable to excel) simply go to the Data Sheet and apply the following filters:
Report Type: By Issuer Rating - Long Term
Report Output Type: Outstanding
Report Currency: Original
Start Date: 1/10/16
Country: United Kingdom
Long Term Generic Rating: AAA; AA+; AA; AA-; A+; A; A-; BBB+; BBB; BBB-
Instrument Type: Bond; MTN; Note