US Corporate Bonds Issuance Reaching $45 billion in first two days of 2024

On Wednesday, corporate borrowers in the U.S. were raising almost $16 billion in bonds, which is a record for a single day. This comes after a $29 billion issuance spree on Tuesday as companies looked to tap into investor demand before key economic data was released.

Pacificorp, a utility owned by Warren Buffett’s Berkshire Hathaway, was one of the companies that issued bonds. It used the funds to settle its debts and fund wildfire-related claims in Northern California and Oregon. Other deals included $2.5 billion of notes issued by France’s Credit Agricole.

The primary issuance of bonds on Wednesday was in line with the strong performance of the previous day. According to a report released by a financial firm, 16 borrowers managed to sell almost $29 billion in bonds, which was the most since September last year. So far, investors have been very receptive to the new bonds.

According to data from Informa Global Markets, the bonds sold on Tuesday were almost three times over-subscribed. The busy start to 2019 comes as the spreads on high-grade bonds have started to widen.

Despite the mixed outlooks about the US economy, investors are still buying high-grade bonds. They believe that the country is headed for a soft landing, while others think it might be in for a mild recession. This is because they are expecting the Federal Reserve to start reducing interest rates later this year.

According to BMO, the high-grade corporate bond market has seen a total of $45.2 billion in transactions this week. This is expected to go higher as more borrowers start coming back to the market.