US$245 billion in the first seven days of the year, global bond issuance hits record!

# Source: Wall Street Insights

By Dong Jing

Data shows that U.S. investment-grade bonds worth $72 billion were issued in two days, and European financing volume exceeded €57 billion in a single day, both setting new records. Corporations rushed to lock in funds ahead of the earnings blackout period and the wave of bond issuances tied to AI projects. Despite the supply surge, robust corporate earnings and attractive yields fueled strong market demand, resulting in almost no new issue concessions.

The global bond market is experiencing its busiest start in history.

According to data compiled by Bloomberg as of January 7, corporations and governments across the U.S., Europe and Asia have borrowed a combined total of approximately $245 billion across various currency markets. This figure marks the highest-ever for the same period on record. U.S. investment-grade bonds saw $72 billion in issuance over two days, while European financing topped €57 billion in a single day—both hitting new all-time highs.

With companies scrambling to secure capital before entering the earnings blackout period next week, issuers that shelved financing plans in December are flooding the market. Buyer enthusiasm remains undimmed despite escalating global geopolitical tensions. This bond issuance frenzy spans the spectrum from high-rated blue-chip stocks to high-yield bonds, reflecting borrowers' intentions to get ahead of an impending surge in bond sales linked to artificial intelligence projects.

Strong market demand has absorbed the massive supply, with premiums on new issues almost negligible. Priya Misra, portfolio manager at JPMorgan, commented: "The year has gotten off to a stunning start. Demand has kept pace with supply, with virtually no new issue concessions."

January is typically one of the busiest months for global bond sales, as companies seek to secure financing early and investors deploy fresh capital into the market. Misra pointed out that robust corporate earnings, resilient consumers and still-attractive investment-grade bond yields—particularly for investors looking to rebalance their portfolios—have all boosted demand this week.

## U.S. Bond Issuance Hits Record Pace

The U.S. investment-grade bond market demonstrated remarkable activity at the start of this week.

Data indicates that as of Tuesday, nearly 40 investment-grade companies had issued a total of $72 billion in bonds, marking the busiest two-day issuance period on record.

Flagship transactions included chipmaker Broadcom raising $4.5 billion via a multi-tranche bond offering, and French telecom firm Orange SA securing $6 billion through a five-tranche dollar bond deal. Both transactions reflected significant demand for long-dated bonds, continuing a trend seen last year.

Eleven more borrowers entered the market on Wednesday, with more deals expected to be finalized later this week. This week's issuance volume is on track to reach the highest level since 2020, when markets were awash with liquidity amid pandemic-era stimulus measures.

Additionally, underwriters anticipate that the largest U.S. banks will kick off a new wave of bond issuances after releasing their earnings reports and lifting debt sales restrictions next week.

Meanwhile, the high-yield bond market is also experiencing its busiest week in nearly a month, with $4.45 billion worth of bonds priced since Monday. Sales of bonds rated CCC—the riskiest tier—are also underway.

## Europe’s Single-Day Financing Volume Sets New Record

The European market also got off to a bumper start.

According to data compiled by Bloomberg, the primary market set a new single-day record for new bond sales on Wednesday, with total financing from corporations, financial institutions and sovereign entities exceeding €57 billion (equivalent to approximately $66.6 billion).

The transactions spanned a wide range of types, with numerous companies issuing multi-tranche notes of varying maturities. Borrowers are taking advantage of positive investor sentiment and historically low risk premiums to front-load their annual borrowing plans.

Fabianna Del Canto, co-head of Capital Markets for Europe, the Middle East and Africa at Mitsubishi UFJ Financial Group Inc., noted:

> "Given the potential risk of spreads widening from current levels, issuers are jumping into the market to lock in attractive financing and benefit from strong new-year investor demand."

Europe’s issuance momentum is expected to continue on Thursday, with mandated transactions from Italy and Portugal poised to hit the market.

At the same time, borrowers in the Asian market have raised over $22 billion this week. With several previously announced mandated transactions yet to be completed, more issuance activity is expected in the coming days.

Notably, despite the deluge of debt supply, corporate bond spreads—the additional yield investors demand to hold these securities over U.S. Treasuries—have remained generally tight. This phenomenon further underscores the market's strong appetite for credit assets.

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