A record half a trillion dollars of debt was raised in January by corporates as issuers raced to leverage attractive borrowing rates preceding hawkish global central bank policies.
Investment grade enterprises raised US$532 billion in January worldwide, the highest value on record for the first month of the year according to Refinitiv data stretching back over two decades, exceeding the previous 2021 record of US$530 billion.
“The main driver is borrowing costs, which are very, very low. With the Fed talking about tightening, rates markets moving higher I think issuers are very much trying to get ahead of whatever the next leg higher in yields is going to be” said CreditSights Global Head of Strategy, Winnie Cisar.
“We had expected to see a deceleration from financials not needing to raise as much as capital as last year but a lot of these issues are among the most savvy in the market in terms of navigating borrowing conditions” Cisar added.