CAM Investment Grade Weekly Insights

Spreads drifted modestly wider throughout the week.  The Bloomberg Barclays US Corporate Index closed the week of May 8 at an OAS of 212 after closing the prior week at 206. Still, we have come a long way from the market wide on the index, which was an OAS of 373 on March 23.  Through Friday, the index total return for the year was nearly unchanged at +0.03%.

The primary market continues to be at the forefront as the historic deluge of issuance continues to break records on what seems like a daily basis.   $93.2 billion in new debt was priced this week according to data compiled by Bloomberg.  This vaulted the week into one of the top-5 busiest ever for volume.  There is no end in sight to issuance as borrowing costs remain low, investor demand is robust and companies are eager to amend, extend, refinance and bolster liquidity amid economic uncertainty.

According to data compiled by Wells Fargo, inflows for the week of April 30-May 6 were +$6bln which brings the year-to-date total to -$80.8bln.