US blue-chip companies unleashed a wave of bond sales on Monday as borrowers look to sell new debt in a week jam-packed with bond auctions, central bank meetings and fresh economic data.
Morgan Stanley, Hyundai Capital America and Bristol-Myers Squibb Co. are among 12 high-grade issuers in the market, marking the busiest day for issuance since 20 deals were brought on Sept. 5 after the Labor Day holiday, data compiled by Bloomberg News shows.
Issuers are likely trying to get ahead of key events this week. Policymakers at the Federal Reserve are set to meet Tuesday and Wednesday, with market participants looking for clues about the outlook for rates. The Bank of Japan kicked off a closely watched policy meeting on Monday, which could bring further changes to its yield-curve control framework. Also, the US government plans to spell out how many new bonds it intends to sell — with higher yields likely drawing in investor demand for high-grade bonds — and US payroll data is scheduled for release on Friday.
Stocks meanwhile are rebounding, US high-grade risk premiums tightened two basis points last week and the spread on a high-grade index of credit default swaps is trading lower, signaling the market’s perception of risk is easing. All three data points hint at a better backdrop for bond sales.
“There is a bit of pent up issuance,” Dominique Toublan, a strategist for Barclays Plc, said in a phone interview. Companies are going to issue while the “cost is clear,” Toublan said. “The next few weeks are quite busy,” he said.
