Corporate Bond Demand Cranks Up as Fed-Driven Rebound Takes Hold
- Spreads have held steady or improved for 22 straight days
- Fed delighted markets with its dovish turn last week
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Demand for corporate bonds reached the highest level of the year this week as the Federal Reserve-fueled rally pushed into the riskiest corners of the high-grade market.
Investors put in the most orders of the year for investment-grade bonds on Tuesday. Bids for Verizon Communications debt topped out at eight times the size of the deal, while Jersey Central Power & Light’s sale was six-fold oversubscribed. That followed the narrowing on Monday of new issue concessions -- the spread between the yield of a new bond versus where the issuer’s comparable debt trades -- to the tightest this year.