US Dollar credit supply: Jump in corporate supply but financials slower

While corporate supply surged to US$75bn in August, up from $27bn in July, there was a slowdown in financial issuances.

Strong supply in August, but still trailing that of last year

Corporate supply was significant in August, totalling US$75bn. This is a notable increase on the low US$27bn in July and above the average for August. It is, however, lower than the substantial US$92bn observed in August last year.

YTD, supply is at US$569bn, a relatively large amount compared to many previous years, but still trailing the US$624bn issued by this time last year.

Supply in August was driven largely by the 9-12yr maturity bucket, amounting to US$25bn. The sectors that pushed the most supply were Healthcare, TMT, Utility and Oil & Gas, each at US$10-14bn. YTD, Consumers and TMT are seeing notable growth YoY, with large supply figures of US$93bn and US$107bn. Utilities are also a considerable player with US$105bn YTD, although this is lower than the US$121bn seen last year to date

Slowdown in financial issuances over August

On the financial side, after an active month of July, we see a slowdown in issuance in August with just over $12bn across segments. The differential mainly stems from bank senior issuances that saw a $9bn drop versus July’s levels. Insurance names were also active last month and issued $12.5bn.

This brings YTD bank senior issuances to nearly $231bn, up $13bn vs 2024 YTD. We also note an increase in bank capital issuances to $42bn, up from last year’s $40bn.

We expect supply to pick up this month as the summer lull officially comes to an end. Additionally, redemptions are set to increase by $4bn in the bank capital segment and to remain stable in the senior one, something which should also work in favour of an activity increase.

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