December corporate bond trading off to hottest start since 2015 -BofA

Republic Services

07/12/2023 18:06

By Matt Tracy
       Dec 7 (Reuters) - Trading in investment-grade corporate
bonds is off to its hottest start to December since at least
2015, according to a report by Bank of America Global Research. 
    Trading volumes have averaged $35 billion a day for the
first three trading days of December, according to the report.
    This is 31% above the average for the same period over the
last three years, the report added. 
    Demand increased for single-A nonfinancials, particularly
for those with ten-year maturities, showing investors'
preference for longer-dated holdings.
    The report found that traders shifted a greater share of
trading toward older, less liquid high-grade bonds in the second
half of 2023. The shift comes as primary market activity has
been slow so far this year compared with previous years, as many
high-grade companies wait out the current elevated rate
environment.
    Nonetheless, the high-grade primary market has been active
to start the month. Eighteen deals worth $18.8 billion have
priced on the week, including $1 billion in five-year notes on
Wednesday on behalf of utility American Electric Power  AEP.O .
    At least two more offerings are expected to price on
Thursday: a 10-year senior unsecured note for Athene, the
insurance arm of Apollo Global Management  APO.N , and a
two-part offering for water disposal company Republic Services
 RSG.N .

 (Reporting by Matt Tracy in Washington
Editing by Shankar Ramakrishnan and Matthew Lewis)
 ((Matt.Tracy@thomsonreuters.com; +1 571 643 3562
Shankar.Ramakrishnan@thomsonreuters.com))