JPMorgan says bond market can handle issuance stampede
Issuance expectations are in a wide range of $175 billion to $250 billion, Kelsey Berro, a portfolio manager at JPMorgan Asset Management, said
JPMorgan Asset Management's Kelsey Berro predicts the investment-grade bond market can handle a potential issuance surge in September, despite wide-ranging forecasts of supply between $175 billion and $250 billion. Portfolio managers have expressed confidence that even the highest estimate is manageable, though the uncertainty surrounding the final figure is creating challenges for market preparation.
August has already seen record issuance, driven by corporate borrowing fueled by the artificial-intelligence sector. Some firms are now targeting junk bond investors to finance data center projects, even for investment-grade debt. Despite supply concerns, demand has been robust, with retail demand for investment-grade bonds surpassing any year since 2010.
Berro believes September's heavy issuance calendar may be more easily managed due to the existing record demand. If supply is absorbed without issues, there could be a rush of sidelined investors back into the market.
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