US Dollar Credit Supply: Supply in May was relatively low

Corporate supply significantly lower than previous years, but in line with 2018

Corporate supply amounted to US$41bn in May, rather low when compared to the US$75-80bn average of the past few years. Redemptions for the month of May were pencilled in at US$54bn, thus net supply was negative at -US$13bn. Supply on a YTD basis is now sitting at US$287bn, running substantially behind most previous years (last year pencilled in US$363bn YTD), although it is much in line with supply seen in 2018 YTD – US$289bn.

The Utility sector has been most active with supply of US$12bn last month, followed by US$7bn from both TMT and Healthcare. Autos saw US$3bn in supply in May and remains the only sector with a notable increase YoY, currently sitting at US$18bn YTD versus US$10bn last year YTD.

The belly of the curve and the very long end of the curve seem to be the preferred maturity for supply this year. The 6-9yr bucket is currently sitting at US$84bn YTD, while the 17yr+ area has seen US$93bn supplied.

Reverse Yankee supply was rather low in May at just €3bn for corporates, meanwhile financials saw €7bn in Reverse Yankee supply. Corporate Reverse Yankee supply is sitting rather low on a YTD basis, at just €15bn, running behind the €26bn supplied by this time last year.      

Bank senior supply running ahead of last year

Financials supply totalled US$45bn in May, lower than the two years previous which pencilled in US$55bn in 2021 and US$72bn in 2020, although it is more in line with the US$48bn and US$34bn seen in 2018 and 2019 respectively. Redemptions in May were relatively high at US$29bn. Therefore, net supply was pencilled in at US$16bn for the month of May.

Bank senior supply totalled US$27bn in May, in line with May last year. On a YTD basis, Bank senior supply has accumulated up to US$178bn, higher than the US$157bn supplied last year YTD. On the other hand, Bank capital has only supplied US$25bn YTD, down on the US$46bn supplied by this time last year.