Whatever it is that has formed in the minds of FIG, SSA and EM bond issuers — be it the belief that the era of rapid rate rises is over, or just good old-fashioned fear of missing out on a favourable market — those that have been in the stampede to bring deals so far this year have done the right thing and have learned the lessons of last year.
The US Consumer Price Index hit its lowest level since October 2021 on Thursday, adding evidence to the notion that the Fed pivot is upon us, giving investors bloated with cash to allocate reason to buy bonds.
That has helped issuers to propel issuance volumes. Supply in SSA, FIG and emerging market bonds has already hit multi-year record highs.
Already unsecured issuance in the FIG market in euros is at its highest for any January going back 15 years, Dealogic data shows.
Borrowers have learned to avoid that which leads to pain. Many that hesitated to print last year were burned as spreads widened following the initial issuance rush in January. Few seem to be hanging about this year.
And they are right to do so. For all the anticipation around the path of US interest rates, risk factors abound. The war in Ukraine is far from over, the ECB has not reached its rate rising crescendo, and recession is a threat.
There is no alternative but to press on with funding, even if issuers have to offer some concessions to investors once the large cash piles of January are allocated.
Issuers should keep seizing the day.