Credit
US Dollar Credit Supply: Strong supply continues
Large levels of supply continue in September, but a slowdown is now expected
TMT sector leads September supply, up 82%
- Corporate supply reached US$87.5bn in September, a level similar to the previous month. It is also approximately double the amounts seen in the two previous years (US$43-47bn). On a YTD basis, supply sits at US$709bn, still ahead of the previous two years. We expect a slowdown in supply in the coming months – windows of opportunity becoming more limited with elections, earnings blackouts, central bank meetings, and economic data releases.
- USD spreads have been tightening versus EUR spreads, namely on the shorter end. The differential in the 5yr has narrowed, leaving limited cost-saving advantages for reverse Yankee supply. We did see €4bn in Reverse Yankees coming to the market in September. While this may be limited in the coming months, volatility around the US elections could open some cost-saving and swapping opportunities.
- Monthly supply was led by the TMT sector, reaching US$31bn, an 82% increase on the previous month.
- Supply so far this year has been dominated by the Oil & Gas, Healthcare, Utility, and Industrial & Chemicals sectors. The only sector to record a decrease in its YTD supply compared to the previous year has been the Consumer sector.
Financial supply surges to US$55bn, boosting YTD totals above 2023 levels
- Financial supply increased to US$55bn, almost three times the levels seen in August, even if still below the substantial supply seen in January. YTD supply has picked up (to US$478bn) and now exceeds 2023 levels.
- Bank supply amounted to US$19bn, of which US$14bn was Preferred senior supply and US$5bn Bail-In instruments. Issuance was highest for (3-6yr) and (17yrs+).
Content Disclaimer
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more