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Credit Insights

New Bond Issue Market Remains Unusually Active

New issue supply was easily swept up as investors continue to pour money into corporate bond funds.

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As opposed to the typical August slowdown, the new-issue market remained relatively active last week. For corporations under Morningstar's rating coverage, $21.5 billion of new bonds were priced over the course of the week.

Typically, new issuance slows down in August, as it's seasonally one of the quietest months of the year as investors head to the beach for the final days of summer; however, investors have cash that needs to be put to work, and all-in interest expense remains near all-time lows, prompting issuers to take advantage of the liquidity and low rates while they are available. This supply was easily swept up as investors continue to pour money into corporate bond funds.

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David Sekera does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.