Three months after Covid-19 infected the corporate bond market, there has been an explosion in issuance. According to our corporate bond visualisation tool, there was a $500 billion increase in outstanding bonds between mid-March and June, based on Markit iBoxx data. That’s the same as the increase in corporate debt for all of last year.
At the same time, the market cap of the S&P 500 index has risen by about $6 trillion. Are these things connected? While some of the market cap rise might be a result of locked-down millennials buying stocks using the popular Robinhood app, equities have also been buoyed by the ability of companies to keep paying dividends and buying back shares in the face of the pandemic. With corporate earnings plummeting, the debt market was a handy place to raise the cash order to do that.
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[…] Einführung zu Beginn dieses Jahres, die sowohl eine historische Börsenrallye als auch einen beispiellosen Refinanzierungsboom auf dem Markt für Unternehmensanleihen ausgelöst hat . Diese und die vorangegangenen Maßnahmen in den Jahren 1998, 2001 und 2008 haben jedoch […]
[…] data. With central banks backstopping the corporate bond market, much of this borrowing was used to reward shareholders via dividends, share buybacks or M&A deals. During the coming year, these companies will have to pay out roughly the same amount – $1.2 […]