Record high of corporate debt issued last week

Mon, 09/09/2024

by Ellie LeTu

Source: Financial Times

• Record high US corporate debt issued

  • 29 Investment Grade bond issuances hit the market on Tuesday (9/3).

    • This is the highest number on record.

  • More activity on Wednesday (9/4) took issuances to over $73B, the largest two day figure in 20 years.

  • Busiest week since May 2020.

  • Issuers included Uber ($4B) and Ford ($2.5B).

• Effort to mitigate volatility

  • Moved to mitigate volatility from upcoming Fed decision, economic data, and election.

  • Borrowing costs fell over the summer.

    • Attractive time to refinance.

  • An effort to de-risk ahead of upcoming event risks.

• Cause of falling yields

  • Average yield was 4.8% on Thursday (9/5).

  • Down from 5.6% in early July.

  • Falling yields indicate caution in the markets.

    • Increased demand for bonds (“safe investments”).