US Dollar Credit Supply: Corporate supply soars in August

August the second highest month of 2024 for USD corporate supply

• Corporate supply reached US$86bn in August, up 76% compared to July and the second highest supply month so far this year. YTD supply is still behind that of last year, at US$615bn.
• August supply was led by the Consumer and TMT sectors each reaching €17bn, a pronounced month-to-month increase.
• Supply this year has been dominated by the Utility, Healthcare, Industrials & Chemicals and TMT sectors. All of these sectors have recorded increases in YTD supply compared to 2023.
• Reverse Yankee supply totalled just under €3bn in August, with YTD supply now at just over €51bn. USD spreads are trading notably wider relative to EUR spreads than they were during the first half of the year, despite more of a retracement in USD seen in recent weeks. This larger differential does open up some cost saving opportunities for US issuers, particularly in longer dated bonds. As such we could see more Reverse Yankee deals coming to the market in the coming weeks.  

Lowest monthly financial supply of the year, sharp drop in senior preferred bonds

• In August, USD financial monthly supply reached its lowest level of 2024 at US$19bn. This was also the lowest August supply since 2019. YTD data showed total supply of US$419bn, the lowest since 2020.
• YTD supply is driven by bank senior preferred bonds (US$177bn) and Finance (US$87bn), up by 30% and 102% from last year, respectively. On a monthly basis, supply of bank senior preferred bonds saw a dramatic drop - from US$36bn in July to just US$4bn in August. Similarly, the supply of credit in Finance fell to US$4bn, down from US$13bn the previous month.