Junk bond issuances from the US have hit an annual record of $432bn in 2021 with almost two months still left to complete the year. The issuance volume this year crossed the previous record set in 2020 of $431.8bn, which was the highest since 2012 as issuers rushed to bond markets post the pandemic after the Fed began purchasing some bonds to ease credit pressures. “Companies are looking at today’s rate environment and thinking, ‘Maybe I can’t get that coupon next year, and the liquidity is there, so let me push through my refinancing and get it done,’” said Noel Hebert, director of credit research at Bloomberg Intelligence. While issuances are at a record this year, analysts of Bofa and Goldman Sachs say that volumes in 2022 will contract 15% and 22% respectively. “With record cash on hand, and a large portion of refinancing already accomplished, 2022 is likely to bring a sharp slowdown in the U.S. high-yield supply versus the past two years,” wrote Goldman Sachs analyst Amanda Lynam.
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