Investors welcomed a respite from non-artificial intelligence related names this week as a wave of investment grade bond issuance, mainly from corporates, flooded the market.
The $56.12bn priced this week would have matched the record for the largest August week of supply ever, if the record hadn’t just been shattered the week prior with $80bn of issuance. That brings month-to-date supply up to more than $136bn, matching the all-time record for the month set in August 2020 with another $20bn-$40bn lined up for next week as well.
The healthy flow of summer supply speaks to how eager investors are to tap the IG market.
“A lot of those investors are coming back to the public markets because you're getting 5%, 6% return on an investment grade bond,” said Doug Longo, co-head of product specialists at Dimensional Fund Advisors. “So even though there's been a lot of issuance, we've seen a lot more demand for fixed income given that the market's offering better attractive yields relative to four years ago.”
Around 20 of the 37 issuers this week came to the market on Monday alone, including Caterpillar, Entergy, O’Reilly Auto Parts and Tyson Foods. “That's typically like...
