US Dollar Credit Supply

US Dollar Credit Supply

Supply in May was relatively low

Corporate supply significantly lower than previous years, but in line with 2018

• Corporate supply amounted to US$41bn in May, rather low when compared to the US$75-80bn average of the past few years. Redemptions for the month of May were pencilled in at US$54bn, thus net supply was negative at -US$13bn. Supply on a YTD basis is now sitting at US$287bn, running substantially behind most previous years (last year pencilled in US$363bn YTD), although it is much in line with supply seen in 2018 YTD – US$289bn.

• The Utility sector has been most active with supply of US$12bn last month, followed by US$7bn from both TMT and Healthcare. Autos saw US$3bn in supply in May and remains the only sector with a notable increase YoY, currently sitting at US$18bn YTD versus US$10bn last year YTD.

• The belly of the curve and the very long end of the curve seem to be the preferred maturity for supply this year. The 6-9yr bucket is currently sitting at US$84bn YTD, while the 17yr+ area has seen US$93bn supplied.

• Reverse Yankee supply was rather low in May at just €3bn for corporates, meanwhile financials saw €7bn in Reverse Yankee supply. Corporate Reverse Yankee supply is sitting rather low on a YTD basis, at just €15bn, running behind the €26bn supplied by this time last year.

Bank senior supply running ahead of last year

• Financials supply totalled US$45bn in May, lower than the two years previous which pencilled in US$55bn in 2021 and US$72bn in 2020, although it is more in line with the US$48bn and US$34bn seen in 2018 and 2019 respectively. Redemptions in May were relatively high at US$29bn. Therefore, net supply was pencilled in at US$16bn for the month of May.

• Bank senior supply totalled US$27bn in May, in line with May last year. On a YTD basis, Bank senior supply has accumulated up to US$178bn, higher than the US$157bn supplied last year YTD. On the other hand, Bank capital has only supplied US$25bn YTD, down on the US$46bn supplied by this time last year.

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This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more

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