Money Market Dysfunction Helps Fuel Corporate Bond Bonanza
- Borrowing costs for some issuers have reached seven-year highs
- Total sales for U.S. corporates on track to beat 2015’s record
This article is for subscribers only.
U.S. companies feeling pain in short-term debt markets are seeking relief by borrowing longer term, pushing already-high levels of corporate bond issuance toward fresh records.
Google parent Alphabet Inc. and food processor Archer-Daniels-Midland Co. are among the companies that have sold more than $5 billion of corporate bonds in the past two months to pay off at least part of their short-term debt known as commercial paper. They’re looking to tame their interest expenses after new regulations have lifted some issuers’ borrowing costs for near-term debt to seven-year highs.