MBS RECAP: Bonds Hold Sideways Despite Deluge of Corporate Issuance


Posted To: MBS Commentary

Here is the primer on Corporate Bond Issuance for those who need it. I realize it's been linked in almost every post this week, but that's the kind of week it is. Keep in mind that the first few minutes of Monday morning saw Microsoft launch a corporate bond that was bigger than the total amount seen on some entire weeks . But even without that $19+ billion deal, smaller offerings have combined to nearly equal that amount over the past 2 days. Some quick math tells us that's roughly $38 billion in new debt being brought to market in 3 days, putting this week on pace to be one of the three busiest ever. Think about corporate bonds as–simply–"bonds." Then think about "supply" in terms of econ 101. Higher supply = prices fall. Ergo, a deluge of corporate bond…(read more)

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