Corporate debt issuance is expected to ramp up this week as more companies emerge from earnings blackout periods, according to research by analytics provider Overbond. New preliminary forecast data from Overbond suggests $25 billion to $30 billion worth of new issuances from major brands in the coming days including Altria, Costco Wholesale, Kellogg’s, Auchan Retail, Pearson and EDF.
The findings, based on an advanced AI algorithm that runs ongoing measurements of the issuer's propensity to issue bonds, are derived from Overbond's Issuance Propensity model. The model, which assigns a score that estimates the relative likelihood an issuer will come to market with bonds within the next 6-8 weeks, analyses factors including bond market, investment banking, and proprietary data.
Commenting on the findings, Vuk Magdelinic, CEO of Overbond, said, “A sector hit hardest by the crisis, there is an alarming number of retail focused outlets immediately turning to the debt markets for a post-COVID borrowing injection. In the vast majority of cases, we are talking about large multinational companies. As the real-world economy rumbles back into life, we do not yet know the full consequences of in terms of exactly how many additional firms will move from investment grade to junk bond status – but the retail sector is certainly in the firing line.”
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