In the first 7 days of the year, $245 billion in global bond issuance set a record!

The global bond market is experiencing the busiest start in history.

As of January 8, according to data compiled by Bloomberg, as of January 7, the total borrowing amount of corporations and governments in the U.S., Europe, and Asia across various currency markets has reached approximately $245 billion. This figure sets a historical record for the same period. U.S. investment-grade bonds issued $72 billion in two days, while Europe raised over €57 billion in a single day, both breaking records.

As companies rush to lock in funding before entering the earnings blackout period next week, issuers who postponed financing plans last December are flocking to the market. Despite escalating global geopolitical tensions, buyer enthusiasm remains strong. This wave of bond issuance spans from high-rated blue chips to high-yield bonds, reflecting borrowers' intent to seize the opportunity before a surge in bond issuance related to artificial intelligence projects.

Strong market demand has absorbed the massive supply, with new issuance premiums being almost negligible. JPMorgan portfolio manager Priya Misra stated, “The start of this year is astonishing. Demand has kept pace with supply, with almost no new issuance discounts.”

January is typically one of the busiest months for global bond sales, as companies seek to secure financing early, and investors put new funds into the market. Misra pointed out that strong corporate performance, resilient consumers, and still attractive yields on investment-grade bonds—especially for investors looking to rebalance their portfolios—have all boosted demand this week.

Record Issuance Pace in the U.S.

The U.S. investment-grade bond market has shown remarkable activity at the beginning of this week.

Data shows that as of Tuesday, nearly 40 investment-grade companies have issued a total of $72 billion in bonds, marking the busiest two-day issuance period on record.

Notable transactions include chipmaker Broadcom raising $4.5 billion through multiple bond tranches, and French telecommunications company Orange SA raising $6 billion through five-year dollar bonds. Both transactions demonstrate significant market demand for long-term bonds, continuing last year's trend.

On Wednesday, 11 borrowers still entered the market, and more transactions are expected to be completed later this week. This week's issuance volume is expected to reach the highest level since 2020, when the market was flooded with liquidity due to pandemic-related stimulus measures.

Additionally, underwriters expect that after the earnings reports are released next week and debt sales are lifted, several of the largest U.S. banks will initiate a new wave of bond issuance.

Meanwhile, the high-yield bond market has also welcomed its busiest week in nearly a month, with $4.45 billion priced since Monday. Sales of bonds rated at the higher-risk CCC level are also underway.

Europe Sets New Daily Financing Record

The European market has also had a fruitful start.

According to data compiled by Bloomberg, the primary market set a new single-day record for new bond sales on Wednesday, with total financing from corporations, financial institutions, and sovereign entities exceeding €57 billion (approximately $66.6 billion). The types of transactions are diverse, with numerous companies issuing various notes of different maturities. Borrowers are taking advantage of positive investor sentiment and historically low risk premiums to complete their annual borrowing plans ahead of schedule.

Fabianna Del Canto, Co-Head of Capital Markets for Europe, the Middle East, and Africa at Mitsubishi UFJ Financial Group Inc., pointed out:

"Given the potential risks of spreads widening from current levels, issuers are jumping into the market to lock in attractive financing and benefit from strong investor demand at the start of the year."

The pace of issuance in Europe is expected to continue on Thursday, with authorized transactions from Italy and Portugal anticipated to hit the market.

Meanwhile, borrowers in the Asian market have raised over $22 billion this week. With several previously announced authorized transactions yet to materialize, more issuance activity is expected to follow in the coming days.

It is noteworthy that despite the oversupply of debt, corporate bond spreads—the additional yield investors require for holding these securities relative to U.S. Treasuries—have generally remained tight. This phenomenon further highlights the market's strong appetite for credit assets