Companies Are Racing to Tap the Bond Market. Why They Suddenly Want to Issue Debt.

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Monday's U.S. issuance of investment-grade corporate bonds was the highest since mid May, not counting the day after Labor Day.

Companies borrowed billions of dollars on Monday as bond yields edged lower ahead of a series of events that could send them higher again.

Companies including Morgan Stanley , Altria Group , and Bristol Myers Squibb were the notable issuers. Also Wednesday, the Federal Reserve is scheduled to disclose its next decision on interest rates. The bank is expected to hold rates steady after raising them 11 times since early 2022, but any indication that it might increase them again could send yields higher. Data due Friday on the job market add uncertainty as well.

At the same time, the yield on 10-year debt has stabilized after climbing steadily since August to hit 4.99% on Oct. 19, the highest level since mid-2007. That surge raised the cost of borrowing, but the yield has declined 8.5 basis points, or hundredths of a percentage point, since then, making issuance more appealing.

 

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