If you ran a corporation, wouldn’t you borrow right now if you could? That’s the conventional wisdom of U.S. companies wanting to refinance debt. Look at how cheap it is to borrow.

Though the Fed’s pursuit of tighter monetary policy up through the end of last year caused bond prices to start falling (and yields to rise), this year the central bank did a volte-face, took on a more accommodating posture and cut rates. It caught investors off guard, and led to a 12% total return in investment grade corporate bond returns this year as of September (following a rout in last year’s fourth quarter).

Barry McAlinden, an executive director and fixed income strategist at UBS, says that duration has been the primary driver of that return (longer duration bonds thrive when interest rates fall). “So the total return of the asset class is significantly higher than the relative return versus Treasurys, which is the credit spread and coupon component.” The 12% total return was in the ICE BofA Master Total Return IG index, he says (the Bloomberg Barclays Global Aggregate Corporate Total Return index was not far off). The excess return against Treasurys (as of September 20) was 4.1% for investment grade, says McAlinden.

But as yields have come off their lows, he says, credit spreads have tightened, likely because there is more confidence in risk assets after the big selloff last year.

Companies from Apple to Disney to Caterpillar helped the bond market set records in September (typically a strong month for investment grade issuance) when $434 billion in corporate bonds moved globally, according to the Financial Times (quoting Dealogic data). Lowered borrowing costs are drawing investors from all over the world to U.S. corporate issues, which dangle more prolific yields to foreign investors, especially those from countries with negative rates. “European buyers, Japanese buyers look at rates we think are very low but they are still higher than what they can get in their home markets,” says Commonwealth’s CIO Brad McMillan.

That view is shared by some of the world’s largest bond investors, says PIMCO fixed-income CIO Dan Ivascyn. In an interview in September, he remarked that his firm remained overweight in U.S. bonds because it was one of the few markets in the world that still had “room to rally.”

Other areas Ivascyn liked include agency-rated mortgage-backed securities and inflation-protected bonds. When it comes to emerging markets, Ivascyn sees selective opportunities, but adds many bonds in these nations remain sensitive to trade tensions.

There’s also been a preponderance of debt in the lower range of the investment grade rainbow as a slew of ‘BBB’ bonds hitting the market have dragged the overall credit quality down, according to Standard & Poor’s, and by the end of last year, bonds with this rating made up more than half the S&P U.S. Investment Grade Corporate Bond Index, outstripping the growth of both the high-yield and total investment grade universes from 2007 to 2018, wrote S&P’s Hong Xie in May of this year.

Standard & Poor’s says the investment grade corporate bond market grew by 194% from 2007 (pre-crisis) to 2018, while high yield grew 98%. Bonds rated ‘BBB’ grew 330%. They hit the $3 trillion mark in May.

Household name companies with ‘A’ or ‘BBB’ debt find it easy to raise money from bonds; it’s proved more attractive to them than IPOs, when the latter market is proving tepid. Companies are issuing this debt for all sorts of reasons—to refinance their maturing debt lines, to fund dividends and share buybacks, to make capital expenditures for growth and competitiveness, and to pursue merger activity.

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