Corporate issuers are rushing to issue bonds before the US elections – Kommersant

Corporate issuers are rushing to issue bonds before the US elections – Kommersant

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According to Financial Times, many companies are “in a hurry” to raise borrowed funds on the bond market before the US presidential elections, which will take place in November. According to LSEG estimates, since the beginning of the year, the volume of issued dollar bonds has already reached $806 billion. This is 40% more than in the same period last year, and the maximum since 1990. The FT cites bankers and investors who say companies are doing so against a backdrop of low spreads – the difference between US corporate and government bond yields – which are now among the lowest in years.

At the same time, bankers said, “the prospect of an election further pushes” companies to issue bonds now rather than next year, when corporate borrowing could potentially become more expensive. “We are now about two months ahead of the normal pace of issuance,” the FT quotes Teddy Hodgson, co-director of Morgan Stanley’s corporate bond markets department. “And I believe the driving force behind all of this is the election.” In addition, many investors note that issuers now want to take advantage of the current market situation before the Federal Reserve, which is expected to begin a cycle of lowering interest rates in the middle of the year.

Evgeny Khvostik

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