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The 30-year thirst — why long bond supply has dried up in a high rate environment
William Hoffman
•6 min read
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Investment grade borrowers these days are in the market for a good time, not a long time.
Issuance of 30-year and longer bond debt sits at just over 11% of total supply year-to-date — the lowest rate of long dated supply in at least the last six years, according to 9fin data.
Borrowers have priced around $120bn of 30-year and longer supply so far this year, including some recent deals this month from Eli Lilly, Charter Communications and CVS. While that volume is higher than what was issued through August of 2023 or 2019, as a percentage of the more than $1trn issued in the US investment grade bond space so far this year, 11% is a new low mark.
30YAL senior supply removes subordinated notes such as perpetuals and AT1s (via 9fin data)
The trend extends to 40-year supply as well. Year-to-date borrowers have priced just $11bn of 40-year paper, less than half of the $27.7bn priced last year through August and down from the $20bn priced over the comparable period in 2023, according to 9fin data.
“We haven't really seen a lot of high quality senior 30-year and longer issuance,” one investor said. “So whenever you get something that's reasonably good quality, it gets eaten up.”
