Healthcare played a key role in making 2016 another record year for U.S. companies' investment-grade bond sales, reports Bloomberg.
Here are four things to know.
1. Investment-grade companies sold $1.35 trillion of bonds in 2016, a 2 percent increase from the year prior, according to Bloomberg.
2. Healthcare companies were among the most prolific debt issuers in 2016, second only to banks, Bloomberg data show. This is attributed to various multi-billion dollar financings for acquisitions, including Abbott Park, Ill.-based Abbott Laboratories' $15.1 billion bond sale for its acquisition of St. Paul, Minn.-based St. Jude Medical, according to the report. Jerusalem, Israel-based Teva Pharmaceutical Industries made a similar-sized offering to fund its takeover of Actavis Pharmaceuticals from Parsippany, N.J.-based Allergan.
3. Some strategists have predicted a 10 percent to 20 percent drop in new bond sales in 2017, according to the report.
4. Bloomberg notes several hurdles in place already for new bond sales in 2017. For instance, interest rates have risen to two-year highs, increasing the cost of borrowing, according to Bloomberg. Also, the report notes, the pipeline for new-acquisition financing is smaller than it was in 2016.
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