The global credit market just issued $61 billion in dollar-denominated bonds, reflecting strong investor appetite for lower borrowing costs. At least nine Asian investors were marketing notes in USD.
Asian borrowers and issuers flocked to the market, including Sumitomo Financial Group and Mitsubishi UFJ Financial Group of Japan. These issuers, among eighteen others, sold their notes with an average size exceeding three times the issuance size in the U.S. high-grade debt market.
Asian borrowers are storming the market, including Japan’s Resona Bank Ltd. and Agricultural Bank of China Ltd., which have marketed U.S. dollar-denominated notes.
Global dollar corporate bonds yield 4.8%
According to a Bloomberg report, high-grade dollar corporate bonds yield roughly 4.8% globally. Meanwhile, borrowing costs have not changed despite increased geopolitical tensions arising from the weekend’s capture of President Nicolás Maduro of Venezuela. The $61 billion issuance on Monday showed confidence in the global economy as the year begins to take shape as one of the busiest seasons for government and corporate funding. It is also the largest issuance since January 2025.
Saudi Arabia issued $11.5 billion via a dollar bond sale, aiming to reduce its dependence on oil by funding massive projects. The offering included maturities ranging from three to 30 years and attracted bids of up to $29 billion.
Omar Slim, co-head of Asia fixed income at PineBridge Investments, noted that demand remains high amid Asia’s favorable economic environment. He believes that the spreads will remain gentle, with a few exceptions where they may widen.
A Morgan Stanley strategist has also predicted that more than $2 trillion in US investment-grade debt issuance could be released into the market this year. According to the strategist, AI expansion projects, refinancing of soon-to-mature loans, and new acquisitions are expected to drive the issuance.
Borrowers rush to lock-in deals amid low borrowing costs
So far, borrowers are rushing to lock in deals with lower borrowing costs, as seen before across the U.S. leveraged credit market. The U.S. leveraged credit market recorded $61 billion in new issuance on July 21, 2025, marking the largest issuance of the year and surpassing $100 billion in issuance since January 2025.
At least 33 deals were closed during July’s leveraged loan launch, with only six repricing deals. Medline, a medical supplies firm, closed the largest deal, valued at $7.57 billion. Most of it included repricing to its term loan. The UKG Inc. recorded $6.27 billion in transactions to reprice its term loan, which was also repriced in October 2024. Applied Systems Inc., a software company, also launched a $2.4 billion repricing deal just six months after repricing the same loan.
According to Bloomberg data, the July 21 session surpassed the January 21 Monday leverage loan launches, which saw approximately $48 billion in deals launched and more than 30 closed. The new deals have now exceeded $100 billion since January 2025 across U.S. leveraged markets, encouraging issuers to issue more loans early this year.
The slowdown was only realized in April, following concerns that U.S. tariffs would impact capital-raising activity. The market rebounded later in May and accelerated further in July.
Charles Schwab’s 2026 outlook for corporate bonds, released last month, recommended an “up-in-quality” approach that favors investment-grade corporate bonds due to low credit yields. The firm estimated a yield of roughly 4.8%, in line with Bloomberg’s reported yield on high-grade U.S. dollar corporate bonds. According to Charles Schwab, high-yield bonds and bank loans should be considered with caution due to rich valuations and elevated default warrants.
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Source: https://www.cryptopolitan.com/61b-floods-credit-markets-in-24-hours/
