The ongoing surge in new U.S. corporate bond sales is positioning January as the most active month on record, particularly in the aftermath of banks releasing their earnings reports. Truist Financial Corp, the financing arm of Truist Bank, has joined this trend by unveiling a two-part senior unsecured bond offering on Monday. The offering encompasses an undisclosed amount of six- and 11-year fixed-to-floating rate notes.
Adding to the flurry of post-earnings debt issuance, Fifth Third Bancorp also announced on Monday its intention to seek eight-year senior unsecured notes. Similar to Truist Financial Corp, these notes will carry a fixed-to-floating rate, and the specific amount remains undisclosed.
The thematic continuation of regional and global systematically important banks (GSIBs) engaging in debt issuance after their earnings releases is evident in the recent bond sales by PNC, Citizens, and U.S. Bancorp. Last week, this trio of regional banks collectively sold $7.25 billion in bonds. Concurrently, several GSIBs, including Bank of America, JPMorgan, Morgan Stanley, and Wells Fargo, also contributed to a substantial increase in the corporate bond supply, totaling $49 billion for the week, according to BofA Global research.
The aggregate data for the first month of the year indicates a remarkable influx of new investment-grade (IG) corporate bonds. BMO Capital Markets reported that January has witnessed a staggering $151 billion in new IG corporate bond supply. Dan Krieter, BMO’s director of U.S. investment grade strategy, suggests that at its current pace, January is on track to surpass historical records, particularly the highest recorded figure of $175 billion in January 2017. In a note on Monday, Krieter highlighted the potential for this month to be recognized as the heaviest January for new corporate bond issuances in the records. The ongoing momentum reflects a robust market appetite and a proactive response from banks, further solidifying the month’s standing as an unprecedented period for U.S. corporate bonds.
