High-Grade Issuers Offer $31.8 Billion of Bonds, Most This Year

(Bloomberg) -- Blue-chip companies rushed to sell corporate bonds Wednesday after the Bank of Japan moved to reassure markets following its unexpected rate hike last week.

Seventeen firms are offering $31.8 billion of debt, the highest amount of US investment-grade issuance this year, according to data compiled by Bloomberg. The number of borrowers is the most since Feb. 26, when 18 firms were in the market. The day’s biggest deal is a record $10.5 billion offering from Meta Platforms Inc. that is its largest-ever.

The bounty of offerings comes just a day after this year’s sales volume surpassed $1 trillion, reaching that threshold at the fastest pace since 2020.

Borrowers are making sure to take advantage of a calmer market while it lasts. Bank of Japan Deputy Governor Shinichi Uchida sent a strong dovish signal Wednesday in the wake of historic financial volatility in that country by pledging to refrain from hiking interest rates when the markets are unstable.

A gauge of perceived risk in US corporate credit fell the most this year Wednesday morning before reversing that move. Average high-grade bond spreads on Tuesday narrowed from their widest level of 2024.

The recent rally Treasuries, and concurrent decline in average corporate-bond yields, has made the cost of borrowing less expensive.

“There will be some companies that want to take advantage of the drop in yields,” Kathy Jones, chief fixed-income strategist at the Schwab Center for Financial Research, said in an interview. “We’ve had a huge plunge in yields across the curve, so if you have some higher cost debt, you may want to swap it out for some lower cost debt or grab some of these yields as an issuer.”

This was expected to be a busy issuance week, before the market chaos caused at least 10 issuers to stand down Monday. Wednesday’s deals bring the weekly total to $38.6 billion, compared with calls for around $40 billion for all of this week before last Friday’s US jobs report helped set off several days of volatility.

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