It has raised over 70 billion US dollars in a single day, a record high since June! Global companies are “rushing” to issue bonds just in time for the Federal Reserve to raise interest rates

The Zhitong Finance App learned that after Tuesday set the busiest global issuance day since June and raised more than 70 billion US dollars, companies have returned to the bond market to speed up financing in an effort to lock in capital before borrowing costs rise further.

According to people familiar with the matter, there will be at least five Asian companies on Wednesday — including Japan Post Insurance Co. (Japan Post Insurance Co.) and Vedanta Resources Ltd. (Vedanta Resources Ltd.) ——Seek to price dollar bonds. Meanwhile, Amazon (AMZN.US) has officially launched the issuance of its first pound-denominated bond, and hyperscale technology companies are continuing to use the bond market to raise funds for the layout of the artificial intelligence (AI) field.

The tense situation between the US and Iran has increased inflationary pressure, and investors are trying to determine whether the Federal Reserve will raise interest rates within this month. This has given companies many reasons to rush into the bond market early. According to compiled data, issuers who completed pricing on Tuesday still attracted strong subscription demand against the backdrop of extremely small interest spread premiums for new bonds compared to existing bonds.

“The issuance of new bonds has been fully digested by the market, and corporate fundamentals are still stable. Currently, the main risks in the global credit market are geopolitics and inflation,” said Mark Reade, head of Asian credit strategy at Mizuho Securities.

However, the escalating conflict in the Middle East and rising oil prices dampened market enthusiasm at the beginning of the week to a certain extent. The US investment-grade market hit its lowest level in three years on the first trading day after the Labor Day holiday.

Another potential fluctuation point is the scale of the next round of 10-20 year treasury stock repurchases scheduled to be announced by the US Treasury Department on Wednesday local time. The significance of this announcement is extraordinary — US Treasury Secretary Bessent said last month that in order to curb the rise in long-term borrowing costs, the scale of repurchases would “at least double.”

According to the data, investor demand in the US investment-grade market on Tuesday was about four times the size of actual bond issuance.

“Interest spreads remained stable during this week's trading, and the subscription book was surprisingly large,” said Owen Gallimore, head of Asia Pacific Credit Analysis at Deutsche Bank. “The credit market showed amazing resilience considering fluctuations in oil prices and treasury bond markets.”