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Firms Pile Into Bond Market in Busiest Day on Record

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Bonds News

Business,Elections,General

A record number of blue-chip firms are swarming the corporate bond market Tuesday morning, taking advantage of cheaper borrowing costs as they look to issue debt ahead of the US presidential election.

Kurt Reiman, head of Fixed Income Americas at UBS Global Wealth Management, joins BNN Bloomberg to discuss the outlook for bonds amid rate cut bets.

-- Ford Motor Credit Co. and Fifth Third Bancorp are among 29 companies tapping the bond market, the busiest single sales day for the market on record, according to data compiled by Bloomberg. Corporations are expected to borrow about $125 billion of US high-grade bonds in September. The issuance deluge comes as corporate finance chiefs aim to lock in debt while risk premiums are low. The average spread on US high-grade firms traded at 93 basis points Friday, the lowest since July 31. Average all-in yields have fallen below 5%, making borrowing more attractive.

The post-Labor Day Tuesday last year was the investment-grade market’s busiest session of 2023, with $36.2 billion of debt priced by 20 firms.

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