After weeks of growing optimism that 2023 would finally bring relief to the world’s battered bond buyers, borrowers took advantage by issuing more than $150 billion in new debt in just four days.

The spree spread in relation to sales around the world had Hong Kong raising $5.8 billion through its largest green bond ever, Units of Credit Suisse Group AG issuing a combined $4.3 billion in US dollars and sterling, and Mexico raising $4.3 billion.

According to the Consumer Price Index (CPI), it was a fresh start for the market which had suffered a huge loss of 16.25% last year. And while investors were making a quick start to claw back some of that money, the pace of this week’s bond rush suggests issuers are bracing for something that is still similar to 2022 (that is, volatile markets where the opportunity to borrow may be closing faster than yours).

The Co-head of Investment Grade Loan syndicates at Barclays Capital, Meghan Grapper, explaining the situation during an event in New York disclosed that, with so much uncertainty about inflation and the direction of the economy, investors’ appetites can easily be whetted by any number of data points or policy discussions, especially through CPI, consumer confidence and central bank meetings or speeches.

The extra premium demanded on the days of such events scare away borrowers, causing all of them to take a critical study at their offerings on days where the chances of a big surprises seem slim, she said.

“Three quarters of supply in any month this year happened in five business days. We have record setting zero volume days in the primary market. And then everyone is running through the same narrow window. The trend is likely to continue this year.”
Meghan Grapper

According to Grapper, companies that need to borrow not only have to navigate higher interest rates, but also run the risk of getting the timing wrong. Even on all those days, bond buyers can test the limits of the market, she added.

Brian Smith, the Buy-Side Product Manager at Bloomberg disclosed that, after a 48-hour selloff of $53 billion in the US corporate bond market, investors began demanding deep concessions to buy debt.

China’s Relief, Bed Bath & Beyond Debt Swap And Goldman Sachs Deals In The Debt Market

China’s troubled property developers got more good news this week. According to reports, Beijing, the capital of the People’s Republic of China, has put in place plans to ease restrictions on the so-called three red lines imposed on the region, which has sparked one of the biggest real estate downturns in history.

The move could be the most significant of measures taken by China to boost the industry, which accounts for about a quarter of the country’s economy.

The country’s developers defaulted on more than 140 bonds last year, not paying a combined $50 billion in domestic and international debt issues.

China Evergrande Group, the developer at the epicenter of the nation’s property crisis, is planning its first in-person meeting with members of a major offshore bondholder group.

Also, Retailer Bed Bath & Beyond has begun preparations for a bankruptcy filing after a worse-than-expected holiday season and a failed debt swap proposal.

The financial journalist, Eliza Ronalds-Hannon reported that, Bed Bath & Beyond’s turnaround plan will primarily revolve around the fate of its prized ‘BuyByBaby’ brand.

Furthermore, the asset management arm of Goldman Sachs led one of Italy’s largest ever deals in the private debt market, a €700 million loan to support a private equity investment in pharmaceutical firm Neoforma Gentili SpA.