US Dollar Credit Supply: Substantial supply to kick start the year

Large supply in January lead by Utilities

Substantial supply in January as Corporates issued US$72bn, which greatly surpasses the previous January high in 2021 of US$61bn. With redemptions sitting around US$29bn, the net supply for the month is about four times that of the last few years, totalling US$43bn.

Most of the sectors saw an Increase in supply compared to January 2023. Utilities were the heaviest issuers with US$23bn issued. In terms of percentage change, Others, Real Estate, and Oil & Gas outperformed when compared to the same month of the previous year. Industrials & Chemicals, Consumer, and Healthcare levels decreased as they went from US$11bn, US$5bn, and US$3bn YTD in 2023 to US$8bn, US$2bn, US$0bn, respectively.

Record-breaking supply in January for Financials

Record-breaking supply for Financials, which totalled US$101bn, sitting above the January 2022 high. With redemptions at US$38.5bn, net supply amounted to US$62.6bn, which is far above last year’s levels, especially when compared to the slightly negative net supply of December 2023.

Bank supply amounted to US$69bn, of which US$53bn are Preferred and US$16bn Bail-in instruments. The increase with respect to last year’s levels are driven by Preferred as the other issued almost the same amount. Financials supply was most concentrated in the 9-12y bucket with US$34.2bn issued. A key difference with respect to January 2023 is a high concentration in the 3-6y bucket, which amounts to US$24.7bn YTD.