Perhaps another sign that markets are ahead of themselves and their fundamentals, is the amount of corporate debt issued during 2024. Above the prior all time high in 2021, last year almost $8Tn dollar were issued, mostly Investment grade, and mostly fixed coupon, despite yields going up (or perhaps because of that). levered loans followed, typically with floating coupons, despite the short end of the curve going down, following official rates, and finally high yield, where issuance has been dwarfed by the prior two. This amount of debt issued comes at a time where spreads are the tightest they had been, but with overall yields on a decent spot, due to higher base rates from Treasuries. The credit cycle is long overdue, and although several factors have delayed it, investors keep piling up on debt. It’s going to be a busy year for rating agencies.
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