Companies avoid selling the bonds that investors crave
On average, orders for high-grade US corporate bonds equal about four times the notes for sale in 2026
Investors are eagerly seeking out longer-term bonds, yet companies are hesitant to sell them. High-grade U.S. corporate bonds typically have an average trading volume around four times the amount of notes available for sale in 2026. Aon sold $2 billion of 30-year notes on September 14, with investors placing orders worth $10 billion.
Similarly, drug maker GSK sold $500 million of 30-year debt earlier in the month, with demand about ten times greater than supply. This surge in demand surpasses what the market has seen this year. The surge is attributed to rising global yields, especially for longer-term bonds, due to inflation fears and central banks increasing interest rates to curb borrowing costs.
However, companies are reluctant to sell bonds that demand heavy interest payments over decades, while investors are keen on bonds that will generate high income for years. Only 5% of U.S. investment-grade bonds sold in the first half of September mature in at least 30 years, making this a scarce commodity, with the exception of artificial-intelligence related issuances.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
