Investment-grade companies stir up the most intense surge of early-year financing in history, with the issuance of US dollar bonds reaching a new high since the outbreak of the COVID-19 pandemic.

Investment-grade companies in the United States are seeing the most intense wave of dollar bond financing since the early days of the COVID-19 pandemic. According to data, the issuance of high-quality dollar corporate bonds has soared to $88.4 billion this week, the highest level for a single week since May 2020 and significantly higher than the expected $70 billion. This hot start is seen as a signal of the trend for the year. Several Wall Street banks, including Morgan Stanley and J.P. Morgan, predict that the issuance of investment-grade bonds in 2026 is expected to reach a historical high. Against the backdrop of falling borrowing costs, companies are accelerating the locking in of long-term funds for mergers and acquisitions as well as data center construction to support the core of the artificial intelligence boom. The bond financing frenzy is not limited to the U.S. market. In Europe, funds raised through bond sales on Wednesday also hit a record high; globally, the total bond issuance for the first week of this year surpassed $200 billion for the first time, showing a significant rebound in global corporate financing intentions. Strong investor demand has become a major driving force for this round of issuances. Data shows that multiple company bonds issued in the U.S. on Tuesday had subscription multiples of around four times the issuance size, with French telecom operator Orange SA's $500 million long-term bond due 2056 having a subscription demand that was more than 15 times the issuance size, highlighting investors' preference for long-term assets. At the same time, the new bond issuance premiums that companies need to pay to attract investors (compared to similar existing bonds) have significantly decreased, further reducing financing costs and strengthening issuance dynamics. Another driving factor for the surge in dollar bond issuances comes from "Yankee bonds" (dollar bonds issued by foreign companies in the U.S.). European banks, including the French Agricultural Credit Bank and the French Industrial Bank, have already entered the U.S. market for financing. It is expected that after Bank of America Corp announces its financial results next week, American banks will also follow suit in issuing bonds. In terms of industry distribution, the energy, utilities, and automotive finance sectors have become important players in bond issuances. Energy giants like Total (TTE.US), utility company Public Service Enterprise Group (PEG.US), and financing subsidiaries of General Motors Company (GM.US) and Ford Motor Company (F.US) have all joined this intensively issued bond wave. Analysts point out that with the combination of falling interest rates, increasing investor risk appetite, and the ongoing AI investment cycle, the investment-grade bond market may see an exceptionally active year.