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General Investing => Fixed Income Focused => Topic started by: MacroTOMI on July 20, 2020, 08:56:30 AM

Title: Corp Bonds: Don't underestimate the Fed's playbook
Post by: MacroTOMI on July 20, 2020, 08:56:30 AM
By giving the allusion of a backstop, the Fed has enabled corporates to gorge on new debt issuance in the hopes to raise enough fresh liquidity to see them through what the Fed may hope is a short term storm. It’s smart, really smart.

With hardly any capital expended and mitigated risk, the Fed has allowed corporates – both IG and High Yield (HY), to go on a credit funding frenzy. This year saw more than $1T in new IG corporate bond issuance alone, barely into the second quarter, almost equal to the total 2019 issuance.

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