- US investment-grade bond issuance topped $US1 trillion on Tuesday as the corporate-credit market rebounds from March lows.
- High-grade issuance on Tuesday reached $US11.2 billion across 11 deals, Bank of America strategists said in a note.
- Year-to-date bond offerings trounce last year’s pace, as companies issued roughly $US1.14 trillion in investment-grade debt throughout 2019, according to the Securities Industry and Financial Markets Association.
- The issuance frenzy comes after the Federal Reserve’s historic move into corporate-debt purchases drove investors back into risk markets.
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US investment-grade companies have issued more than $US1 trillion in debt in the year-to-date, offering bonds at a voracious pace as the coronavirus pandemic lifts cash demand.
High-grade issuance on Tuesday reached $US11.2 billion across 11 deals, Bank of America strategists said in a note. The single-day sum brings the year’s total to $US1.003 trillion. Nearly $US200 billion in debt has been issued in May so far as companies capitalise on growing risk-on attitudes.
The bond frenzy is far more intense than in the year-ago period. Investment-grade firms offered $US1.14 trillion in investment grade debt through all of 2019, according to the Securities Industry and Financial Markets Association.
The corporate bond market has enjoyed a sharp recovery from initial coronavirus-fuelled lows following unprecedented Federal Reserve intervention. The central bank announced on March 23 it would issue debt to large companies through direct bond purchases and by taking in corporate-credit exchange-traded funds. The announcement buoyed the tumbling sector and the stock market through April and into May.
The monetary policy announcement also boosted inflows to investment-grade bond funds and ETFs over recent weeks. March saw record amounts of cash pulled from the credit market as investors flocked to US Treasuries.
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