US Dollar Credit Supply: Corporates and financials’ supply drop in June

Corporate supply trailing that of last year

As we reach the halfway point of 2025, YTD supply has totalled US$464bn. Whilst this does run ahead of most previous years, it does trail last year slightly which had pencilled in US$481bn by this time. We expect USD supply to reach up to US$800bn in 2025, falling just marginally short of last year. Increased M&A activity and higher CAPEX add to the higher redemptions scheduled as the cost of debt falls. This means net supply ends the year at US$250bn.

Reverse Yankees supply will continue to increase

USD spreads saw a touch of underperformance last week, pushing the USD EUR spread differential wider. We expect this will continue as USD spreads should underperform more from relatively tight levels. There was €7bn in reverse Yankee issues in June, putting YTD supply at €49bn, in line with the €48bn seen by this time last year. We forecast supply will total €85bn in 2025, This would mark the second-highest year for Reverse Yankee supply on record, after the €98bn of 2019. We believe opportunistic funding will be the driver for the increase in supply. Redemptions for Reverse Yankee bonds are set to rise in 2025 to €47bn, up from the €39bn maturing in 2024.

June’s USD financial supply marks the lowest level in 2025 YTD

On the financial side, the June supply marks the lowest level in 2025 YTD with less than US$29.5bn printed. Despite the slow primary market, the relatively low redemption level brings the net issuances only slightly in the negative area at -US$3bn, well behind the drop noted in March with -US$11bn in net supply.