US Dollar Credit Supply: Corporate supply was strong in March  

Corporate supply was more substantial in March

USD corporate supply was strong in March, totalling US$132bn. This is a substantial increase on the first two months of the year and the largest month on record since February last year. Redemptions were on the high side in March, amounting to US$71bn. In the past two years March saw closer to €70-80bn in supply. In 2021 and 2022, however, supply was more in line with the large supply we saw this year.

YTD supply is now sitting at US$285bn. This is on the high side historically but is trailing the US$301bn issued by this time last year.

Reverse Yankee supply to stay strong

USD credit is struggling more than EUR credit but is coming from very tight and rich levels. USD spreads are still looking a bit on the expensive side within the defined range. Nonetheless, USD spreads have widened versus EUR spreads which now opens notably more attraction for Reverse Yankee issuance. A cost saving advantage can be found for many US issuers considering how tight the Cross Currency Basis Swap is.

Already we saw a pick-up in Reverse Yankee supply coming to the market, with €3.4bn in corporates and €8.1bn in financials being issued in March. As such, the YTD corporates total now sits at €22bn, up on the €18bn seen by this time last year, and €15bn for financials.

Overall USD Financial supply reaches lowest level since the start of the year

Banks senior unsecured supply of USD instruments declined for the second consecutive month in March, laying at US$12bn. This represents a significant drop compared to March 2024 in which US$29bn was printed.

A similar trend is noticeable in the bank capital segment in which nearly US$3bn was printed over March, only half of last year’s level. It is also a notable US$9bn drop compared February’s total and makes it the lowest supply of 2025 YTD.

Redemption levels will increase again this month to reach US$27.4bn in bank senior unsecured and US$9.7bn in bank capital. Therefore, we expect to see issuances perk up again in April to compensate for the uptake in redemptions.