Post-Labor Day Bond Supply Hits 2020 Low

Eighteen borrowers presented bond offerings on Tuesday. This marks the lowest number of issuers for a post-Labor Day session since 2020. The lineup included UBS AG, Bank of Montreal, and a private credit fund linked to Ares Management Corp. GSK Plc also marketed paper to refinance debt from its Nuvalent Inc. acquisition. The volume was sparse for a day that usually opens the year's busiest funding window.

Market sentiment deteriorated as equities fell and oil prices rose. These moves sharpened expectations that central banks will continue tightening policy to control inflation. Global yields remain at levels not seen since 2008. Persistent price pressures have led investors to prepare for further rate hikes. GN auto markets/bonds: bond market data confirms the shift in risk appetite.

Current Activity Lags Recent Records

The day after Labor Day is typically a high-volume period. In 2024, 29 issuers tapped the market on that date. Last year, 27 companies sold a record number of bonds. This year's figure of 18 is significantly lower. The slowdown reflects a cautious approach to new debt issuance.

Annual Issuance Remains At High Level

US investment-grade issuance has reached 1.49 trillion dollars so far. This figure is 7.7% higher than the 2020 pace, which set the previous high. Heavy borrowing by companies building artificial intelligence infrastructure has driven this growth. The overall volume remains robust despite the recent daily dip.

September Supply Expectations Stay Elevated

Dealers have projected approximately 215 billion dollars of US high-grade supply for September. This would set a new monthly record if realized. 8.05 billion dollars has already priced due to an active pre-holiday period. Syndicate desks expect around 70 billion dollars to print this week. Investors face a mix of near-record supply and higher yields.