While municipal
bond issuance increased considerably during November and December in anticipation of Tax Reform and revised tax - exempt status for certain issue types, we would expect that, post signage, longer term supply should begin to decline which, of course, should prove favorable for bondholders.
Not exact matches
This
increased demand has been met with an equally large
increase in supply as corporate
bond issuance has roughly doubled since 2008.
It also appears that the ECB will concentrate on reducing its purchases of government (rather than corporate)
bonds, but here
issuance is
increasing, with the net amount of eurozone government debt set to expand in 2018, in contrast to the contraction seen over the previous 18 months.
Business credit has been falling, but this has been more than offset by
increases in non-intermediated sources of funding, such as equity raisings and corporate
bond issuance.
Of the $ 50 billion
increase in the past couple of years in total non-government
bond outstandings (offshore plus local
issuance), almost two - thirds has been within the local market (Graph 7).
This led to a continuing squeeze of credit spreads and
increased issuance of riskier
bonds, a phenomenon reminiscent of the exuberance prior to the global financial crisis.
The resulting
increase in corporate
bond issuance has pushed up swap spreads, with the spread on US 10 - year (bank / government) swaps, for example, recently at its highest level for several years (Graph 7).
Other factors may have been a degree of illiquidity in the swap market in the face of large
increases in private sector
bond issuance and rising interest rates.
This strength in gross
issuance has led to a sharp
increase in non-government
bond outstandings.
These concerns might recently have been exacerbated by changes in the pattern of corporate financing: in countries in which the swap spread has
increased the most — the US and UK — growth in private sector
bond issuance has been relatively large, while net equity
issuance has been low (or even negative as in the United States).
In addition, continuing robust Uridashi
issuance appears to have provided ongoing support for the Australian dollar, despite
increased maturities of existing A$ Uridashi
bonds.
Over the recent weeks, there has been much debate about the notable
increase of
issuance in the fledgling green
bond market.
To
increase returns, there are several types of strong price signals government can put in place that could underpin green
bond issuance:
Indeed, the supply of dollar
bond issuance in this year's first quarter hit record levels, and those levels don't account for the
increased use of «reverse Yankee
issuance,» whereby U.S. corporations issue into European markets denominated in euros.
The global
increase in environmental awareness has led to a marked rise in the appetite for green
bonds and this an opportunity for green Sukuk
issuances says...
Officials also added that an upcoming
bond issuance of $ 7.86 million to fund various park projects in the next two years will not
increase taxes for residents.
The new administration has signaled policies such as tax cuts,
increased Treasury
issuance and reduced regulation that many investors believe could result in higher interest rates, higher inflation and a favorable environment for corporate
bonds.
The remaining USD 270 billion of net new
issuance propelled the market value of the S&P 500
Bond Index to over USD 4.5 trillion by the end of 2017 — an
increase of 2.0 trillion since 2011 (see Exhibit 1).
The dominant position of Canadian investment banks in the Canadian debt markets will be eroded by
increased investment by Canadians in the
bonds of foreign issuers and
increased issuance by foreign entities in the Canadian dollar debt markets.
For instance, if inflation
increases by 1.5 % six months following
issuance, the value of a $ 1,000 real return
bond at the end of the six - month period would be $ 1,015.