US corporate bond issuance seen increasing after yields slide

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Some investors are predicting an increase in corporate bond issuance in the New Year, after bond yields slid last week, opening the door for companies to refinance existing debt or issue new debt at lower costs.

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Published by

18 Dec 2023

Total U.S. investment-grade corporate debt issuance in 2023 is expected to be similar to 2022's total of roughly $1.23 trillion, according to data from the Securities Industry and Financial Markets Association (SIFMA) trade group, well below 2021 and 2020 totals of $1.47 trillion and $1.85 trillion, respectively.

But investors and other market participants now see issuance picking up next year following expectations of a quicker pace of interest-rate easing after last week's Federal Reserve meeting. There are $770 billion in investment-grade bonds due in 2024, according to data by Morgan Stanley.

The majority of corporate borrowers have been waiting for the Fed to cut rates before refinancing in the current high-rate environment.

“This should be an extremely welcome environment for corporate issuance," said Blair Shwedo, head of U.S. sales