Fed Boost, Rate Rally Spur BBB Borrowers to Primary Market
- Borrowing costs are around 14-month lows, a boon for issuance
- Broadcom, rated just above junk, expected to sell $11b Friday
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It’s as good a time to buy BBB bonds as it is to be a BBB rated borrower.
The cheapest funding levels seen in more than a year have driven heavy issuance among companies rated in the lowest tier of the investment-grade market this week, with about $19 billion of the week’s $28 billion of supply coming from BBB borrowers, according to data compiled by Bloomberg News. This comes after a dovish pivot by the Federal Reserve and weak global economic data that drove a rally in Treasury yields.