In a single day, over $70 billion was raised, reaching the highest level since June! Global companies are racing to issue bonds ahead of interest rate hikes by the Federal Reserve.

After setting a record for the busiest global issuance day since June on Tuesday, with total fundraising exceeding $70 billion, companies are rushing back to the bond market to accelerate financing, seeking to lock in funds before borrowing costs rise further. According to insiders, at least five Asian companiesincluding Japan Post Insurance Co. and Vedanta Resources Ltd.are seeking to price dollar-denominated bonds on Wednesday. Meanwhile, Amazon.com, Inc. has officially launched its inaugural issuance of pound-denominated bonds, with major tech firms continuing to leverage the debt market to fund their ventures in artificial intelligence (AI). The escalating tensions between the U.S. and Iran have intensified inflationary pressures, and investors are trying to assess whether the Federal Reserve will raise interest rates this month, prompting many companies to enter the bond market ahead of time. Compilation data shows that issuers who priced their new debt on Tuesday still attracted strong subscription demand, even against a backdrop of minimal spread premiums on new bonds compared to existing bonds. The new bond issuance has been fully absorbed by the market, and the fundamentals of companies remain robust. The main risks in the current global credit market are related to GEO Group Inc and political inflation, said Mark Reade, head of Asian credit strategy at Mizuho Securities. However, the rising tensions in the Middle East and increasing oil prices have somewhat dampened market enthusiasm at the beginning of the week. The issuance scale in the U.S. investment-grade market on the first trading day after Labor Day hit the lowest level in three years. Another potential point of volatility is the upcoming announcement by the U.S. Treasury, scheduled for local time Wednesday, regarding the next round of buybacks for 10- to 20-year outstanding government bonds. This announcement is particularly significant, as Treasury Secretary Janet Yellen indicated last month that to curb rising long-term borrowing costs, the buyback scale would at least double. Data shows that on Tuesday, investor demand in the U.S. investment-grade market was approximately four times the actual issuance size. In this weeks trades, spreads remain stable, and the subscription books are unexpectedly large, noted Owen Gallimore, head of Asia-Pacific credit analysis at Deutsche Bank Aktiengesellschaft. Considering the volatility in oil prices and the Treasury market, the credit market has exhibited remarkable resilience.