Companies Bet Against High for Long in Bond Blitz

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(Bloomberg) -- Companies storming the bond market at record-breaking pace made one thing clear: They don’t expect rates to stay elevated for long.Most Read from BloombergBoss of Failed Crypto Exchange Gets 11,000-Year SentenceEverything Apple Plans to Show on Sept. 12: iPhone 15, Watches, AirPodsUS, EU Agree on Mideast-India Rail and Shipping Corridor at G-20California Shows an Electric-Car Uprising Headed for the USEx-Google CEO Eric Schmidt Scraps $67.6 Million Purchase of Abandoned Superyacht

More than $110 billion in bonds sold globally this week, the busiest start to September on record, with issuance heavily skewed to debt due in under 10 years. The barrage was led by investment-grade issuers, teeing up a wave of junk, including billions of dollars in buyout funding.

The share of US high-grade corporate bond issuance with a maturity of 10 years or longer was just 10% in the month to Sept. 6, the lowest since at least 2010, according to strategists at Bank of America. Even then, demand is anticipated to outstrip supply, as the predicted September total would fall short of most prior years, and year-to-date US high-grade sales are down 4%. And even after jumping 14% this year, global issuance is still running behind 2020 and 2021 levels, data compiled by Bloomberg show.

Private credit lenders are just getting started in the world of consumer and asset based finance, according to Rob Camacho, Blackstone’s co-head of asset based finance. Armen Panossian, one of Oaktree Capital Management’s two incoming co-chief executive officers, said the demand for private credit is tempting investors who might otherwise have placed funds with private equity firms.

AB CarVal Investors LP and Serone Capital Management LLP are joining a growing roster of hedge funds trying to carve out their first slice of Europe’s market for collateralized loan obligations.

 

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