Decade-Long High-Grade Bond Binge May Come to an End in 2019
- Tech, financials and telecom drove IG supply lower in 2018
- Expect supply to fall again in 2019 as borrowing costs climb
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It may be the end of an era. If all the pieces that suppressed U.S. investment-grade corporate bond issuance in 2018 remain in place, what has been a decade of heavy bond sales could come to an end in 2019.
Borrowers sold nearly $1.1 trillion of bonds in 2018, just short of 2017’s record $1.2 trillion. Analysts expect some of the main drivers of the decline -- corporate repatriation of cash, borrowing costs rising off of record lows, and broader uncertainty, somewhat offset by strong M&A-related supply -- to persist in the new year, affecting some sectors more than others.