Credit Trends: Global Financing Conditions: Bond Issuance Remains Strong Despite An Expected Modest Contraction

S&P Global Ratings Research expects global bond issuance to contract roughly 1% in 2021 (see chart 1). Issuance remained historically strong in the second quarter, with most sectors showing growth over last year's first-half pace. That said, overall global nonfinancial issuance was unable to keep up with the extraordinary $1.1 trillion total from the second quarter of 2020. The high aggregate issuance total from 2020 remains hard to beat, though the 2021 total should still be historically high, likely surpassing 2019 by a wide margin. Concerns persist over rising inflation in the U.S., which could prompt rising interest rates and possible spillover to other regions. However, S&P Global economists believe the recent jump in inflation to be largely transitory and

...- With financing conditions still favorable across all asset classes, issuance totals in the second quarter remained robust. - In total, issuance did decline relative to the same point in 2020, but last year produced unusually high issuance, and the full-year 2021 total will likely finish strong despite a decline. - Investors' hunt for yield pushed speculative-grade bond, leveraged loan, and collateralized obligation totals to multiyear and in some cases record-breaking first-half totals in 2021. - Some uncertainties remain as cases of the delta variant rise, but current inflation concerns are likely transitory and economic growth projections remain very strong....

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