* Tally marks second-largest day of 2017 so far
By John Balassi and Mike Gambale
NEW YORK, March 6 (IFR) - The US investment-grade bond
market logged US$22.65bn in deals on Monday, the second-largest
day of 2017 so far as borrowers looked to get ahead of a looming
rise in rates.
Eleven deals launched in the week's first session, which saw
hefty trades from HSBC (US$5bn), Great Plains Energy (US$4.3bn)
and Commonwealth Bank of Australia (US$3bn).
After Fed Chair Janet Yellen signaled last week that rate
hikes are coming down the road, companies with funding needs
came steaming into an already red-hot high-grade bond market.
Investors have ready money to put to work, and the surge of
demand is allowing issuers to sell new deals at very favorable
"There is a very strong bid for high-grade bonds at the
moment because there is a tremendous amount of cash ... looking
for a home," one senior syndicate banker told IFR.
"Money is coming here from everywhere, because there is
still a decent yield pick-up in buying US dollar bonds," he
"It is hard to see at least in the near term what will stop
It was already the fourth day of the year with primary
volumes above US$20bn, according to IFR data, as the market has
been booming since the November election win of President Donald
Average high-grade corporate bond spreads are 11bp tighter
year-to-date and have moved 6bp tighter in just the past 10 days
alone, data from Bank of America Merrill Lynch shows.
At just 118bp over US Treasuries, spreads are at their
lowest level since June 2014.
"The main driver for the surge in issuance is that people
don't want rates to move away from them, while spreads are also
nearing their 2014 tights," said Mark Howard, head of US credit
strategy at BNP Paribas.
"People will not want to be kicking themselves by delaying
issuance, especially with risks around elections in Europe and
the potential for both rates and spreads to back up.
(Reporting by the IFR team; Writing by Marc Carnegie; Editing
by Jack Doran)