High-Grade Borrowing Onslaught Sets Two-Day Record With 38 Deals

(Bloomberg) -- Investment-grade borrowers stormed the U.S. primary market again Wednesday, bringing another 17 deals one day after setting the single-day record with 21.

The deluge of bond offerings from companies makes up for a slowdown in sales over the two weeks before Labor Day. Issuers are back from the holiday looking to capitalize on an attractive funding environment that could worsen should rates rise.

The 38 deals so far this week are good for a two-day record, according to strategists at Bank of America Corp. The previous busiest two-day period by number of deals came right after Labor Day in 2019, when 36 new issues priced, strategists led by Hans Mikkelsen wrote in a note Tuesday.

While the number of issuers has been unprecedented, the market has seen busier volume days in the past. 

Three days in 2020 saw between $37 billion to $40 billion of investment-grade supply price, and the all-time record day was $52 billion in September 2013, according to JPMorgan Chase & Co. strategists led by Eric Beinstein. Tuesday saw $33 billion of volume, according to data compiled by Bloomberg. 

“Clearly issuers were waiting for post Labor Day to come to market,” Beinstein wrote in a report Tuesday. 

Tuesday's overwhelming calendar was absorbed well by investors, with deals tightening nearly 22 basis points on average and order books 2.2 times covered. But a second straight day of historic supply could start to pose problems and lead to wider risk premiums if investor demand doesn't keep pace with all the new sales. 

“While the one-day supply figure is not so relevant, several days of very heavy supply can certainly weigh on the market,” the JPMorgan strategists added. 

Walmart Inc., Toyota Motor Credit Corp. and Marriott International Inc. were among Wednesday's borrowers. Walmart's deal includes a record-setting $2 billion green tranche, the retailer's first and the largest USD green bond sale from a corporation. 

Read More: Walmart Breaks Green Bond Record With $2 Billion Debut Issuance

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