US Dollar Credit Supply: Corporate supply increases in November     

Year-to-date corporate issuance sits at US$632bn, in line with our forecast of no more than US$650bn for 2023. Despite redemptions of US$41bn, net supply was positive in November, accounting for US$16bn. Current year-to-date net supply sits at €134bn.

Healthcare, Industrial & Chemicals, and Utilities led November supply, accounting for US$16bn, US$12bn, and US$12bn, respectively. With this, Industrials & Chemicals have surpassed the 2022 supply figure of US$85bn, reaching US$90bn YTD. Additionally, from a YTD perspective, most sectors are well above 2022 levels, with TMT being the exception where supply decreased by one third to US$95bn. Real Estate sits just above last year’s supply at US$27bn.

YTD Corporate Reverse Yankee supply is now at €40bn. Due to USD corporate spread outperformance versus EUR, the equation for many corporates shows no cost saving advantage. Nevertheless, November saw a notable increase of Corporate Reverse Yankee supply, by around €7bn.

Financials supply totalled US$32.5bn in November, decreasing from the US$53bn seen in October, and the lowest monthly level in the second half of this year apart from August. On a YTD basis, financials supply has risen to US$427bn, although supply will still close the year at a substantially lower level than recent years. With redemptions of US$23.1bn, net supply amounts to US$9bn for November and now stands at US$114bn from a YTD perspective.

Bank supply totalled US$25bn, of which US$12bn is senior, and US$13bn is bank capital. November bank bond issuance is still sitting at a lower YTD level compared to 2022 and is around half when compared to October of this year and November 2022.