Companies flood the bond market as rate reality bites

Bond issuance slowed drastically last year.

That's because rate volatility made it difficult for bankers to place deals with investors — and companies balked at yields that were vastly higher than anything they'd seen over the last decade. February's activity shows that companies are now coming around to the idea that we may not be returning to the low-rate world of the 2010s any time soon.Just look at the 10-year Treasury, the main benchmark for corporate borrowing. It sat below 3% for only two periods in modern U.S. financial history — the post-Great Depression and post-financial crisis eras.

“The level of rates that we had from 2012 to 2022, we've never seen that before except after the Great Depression and World War II,” says Robert Tipp, chief investment strategist at PGIM Fixed Income.

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