Global companies are seizing the opportunity to issue bonds at a record pace amid strong investor demand and uncertainty about future interest rates. Over the past three days, firms in the U.S., Europe, and Asia have sold $87 billion in bonds, with 88 investment-grade and high-yield deals closed in just 72 hours.
In the U.S. alone, more than 40 investment-grade firms have issued $53 billion worth of bonds, the busiest three-day calendar since 2021. Companies including Hasbro (HAS) and PNC Financial Services Group (PNC) followed in the footsteps of CVS (CVS) and Mastercard (MA), issuing debt for "general corporate purposes." Meanwhile, high-yield bond sales are also accelerating, with 13 borrowers pricing nearly $11 billion, making it the busiest week since February. Cloud Software Group Inc., the parent company of Citrix Systems, raised $1.8 billion in secured notes, building on a $1 billion term loan from March.
Despite holidays in Europe, issuers sold around $23 billion in bonds this week, including a €340 million junk bond by Latvia's Air Baltic Corp AS, offering a yield of 14.5%. Avia Solutions Group successfully priced $300 million in bonds at a 9.75% yield, while Fedrigoni SpA and Befimmo (BEFB) marketed higher-risk debt with significant investor interest. "There is an emerging confidence in the market around the sectors and credits which are better positioned to deal with higher-for-longer," noted Murad Khaled, head of EMEA leveraged finance at Bank of America (BAC).
Asian companies have also joined the global borrowing spree, with at least eight corporate borrowers pricing offshore bonds this week, including a Korean toll road operator and a Chinese bank. Borrowing costs in Asian credit markets are near historic lows, with investment-grade dollar bonds yielding a mere 81 basis points above U.S. Treasuries.
The global rush to issue debt underscores the uncertainty surrounding future interest rates, particularly in the U.S. While Sweden's Riksbank recently eased rates and the European Central Bank is expected to follow, the timeline for the Federal Reserve remains unclear. David Schiffman, portfolio manager at Aquila Investment Management, said, "There's still a lot of uncertainty not just related to what the Fed may or may not do, but also with geopolitical risk."
