US dollar credit offer ahead of previous years so far | Report


summary

Business supply totaled US $ 54 billion in June, bringing the cumulative total to US $ 410 billion. This is well ahead of previous years on an annual basis that averages $ 390 billion, with the exception of last year. The offer is set to be a significant amount this year, and we expect it to total $ 800 billion. TMT and utilities were the most supplied sectors, with $ 19 billion and $ 17 billion respectively. TMT’s supply has already reached US $ 158 billion on an annual basis. Although TMT’s buybacks are also high, set at US $ 106 billion for 2021. As with the euro, corporate supply in US dollars has largely focused on the longer end of the curve. This was one of the catalysts for the acceleration of the curves.

Reverse Yankee’s offer has not been as large as expected at just € 26 billion since the start of the year. We had initially forecast a forecast of 80 billion euros for the Reverse Yankees in 2021. However, USD spreads, particularly on the short end of the curve, have not yet underperformed against the EUR. . We still expect USD spreads to underperform as we see some credit weakness in the second half of the year. This in turn will increase the supply of Reverse Yankee, but we will struggle to reach 80 billion euros.

Financial supply amounts to US $ 317 billion on an annual basis

The financial supply amounted to US $ 51 billion in June, in line with previous months. The supply on an annual basis amounted to US $ 317 billion. This is notable, ahead of previous years, with the expectations of last year. On average, supply would normally be around US $ 240 billion for the first half of the year. Buyouts in June were only US $ 22 billion, leaving the net supply at US $ 30 billion. As it stands, the net supply is estimated at US $ 100 billion for the year to date. Buybacks in July will rise to US $ 32 billion, which means we could see a relatively busy July in terms of issuance, or the net supply will be lower.

Senior banking offerings stood at US $ 28 billion in June, including US $ 10 billion of bank bailout offer and US $ 18 billion of preferred bank offer. Bank bailout debt has become increasingly popular, with US $ 79 billion provided so far this year, compared to just US $ 35 billion last year since the start of the year. Bank Capital is also up from last year, now standing at US $ 49 billion this year from US $ 40 billion in 2020 YTD. It is interesting to note that the majority of the financial offer was between 3 and 9 years old in June. However, on a YTD basis, the supply is spread more evenly across the curve.


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