Corporate borrowers kicked off 2025 with a record $83bn in dollar debt safety sales, capitalising on buoyant investor demand to raise obligation ahead of any trade volatility sparked by Donald Trump’s profitability to power.
Borrowing in the US dollar stake distribution-grade and high-gain debt safety markets reached $83.4bn by January 8, the highest year-to-date figure since 1990, according to data from LSEG.
High-grade borrowers have led the rush, including international banks such as BNP Paribas and Société Générale, car giants such as Toyota, and heavy machinery maker Caterpillar. US banks are expected to join the fray later in January after their profits period.
“The trade is powerful, so there is no require for them to delay. They’re trying to arrive as early as feasible,” said Marc Baigneres, global co-head of stake distribution-grade finance at JPMorgan.
The rush of recent obligation sales comes as spreads — the difference between the gain on corporate obligation versus safer national securities — are near multi-decade lows, spurring companies to raise funds cheaply while they can.
“There are a lot of risks to spreads — expense boost picking up, the economy slowing down, the Fed potentially pausing rate cuts and even moving on to rate hikes,” said Maureen O’Connor, global head of Wells Fargo’s high-grade obligation syndicate.
The average US stake distribution-grade spread sat at just 0.83 percentage points on Wednesday, not far above its narrowest point since the late 1990s, according to ICE BOFA.
January is typically busy for obligation issuance, especially by banks. But the latest deal burst comes as companies lock in cheaper obligation before Trump’s inauguration — with economists warning that the incoming US president’s telegraphed policies, including trade tariffs, could be inflationary.
On Wednesday, minutes from the last Federal safety net conference showed that officials were also concerned about expense boost and wanted to be “careful” with the pace of upcoming rate cuts.
large borrowers are also under pressure to refinance quickly, with $850bn of high-grade dollar obligation set to mature this year and another $1tn in 2026, according to Wells Fargo calculations.
“It’s a very attractive trade surroundings” for borrowers, said Dan Mead, head of lender of America’s stake distribution-grade syndicate. “You continue to view well investor liquid assets balances and receptivity to the recent issues coming to trade, and pricing at very attractive spreads that leads to issuers looking to leave sooner rather than waiting.”
Edward Al-Hussainy, elder gain rate and money analyst at Columbia Threadneedle, said retirement fund funds and insurance companies were “exceptionally predisposed” at the instant to buy obligation.
Banks are typically first to receive advantage of narrow spreads and are among the most energetic issuers so far. But trade participants said non-monetary borrowers could join the rush before the 10-year Treasury gain — a standard for global borrowing costs — rises any further. It now sits at about 4.7 per cent after climbing sharply in recent weeks.
“We have a couple of fairly critical uncertainty events in January,” said O’Connor, pointing to US jobs data due on Friday, which will propose investors clues about the upcoming path of gain rates, and Trump’s January 20 inauguration.
“We’ve heard quite a bit of rhetoric from the incoming administration on what the trade could view quickly on the back of that,” O’Connor said. “I ponder there is a concern that that could catalyse another leg higher in Treasury yields.” Some “coupon-concentrated borrowers” — meaning companies concentrated primarily on the total gain they pay to investors — “are trying to get in front of that”, she added.
This week’s volumes, which have been condensed to just three days by shortened buying and selling hours on Thursday, and Friday’s payrolls, pursue on from a borrowing bonanza in 2024 — when global issuance of corporate bonds and leveraged loans hit a record $8tn.
While the current conditions remained favourable for sellers of obligation, some buyers said they were now willing to sit on the sidelines until more alluring conditions emerge.
“The vast majority of deals are coming at levels that leave very little worth on the table,” said Andrzej Skiba, head of BlueBay US fixed turnover at RBC GAM. “[It has] looked rather unappealing and we prefer to keep powder arid for a potential boost in volatility following the inauguration, as the trade finds out this recent policy mix and the Fed’s response to that.”
