“I can’t remember when $5 billion worth of deals came in one day,” said Matt Eagan, a portfolio manager at Loomis Sayles & Co.
Demand has been strong enough for junk bonds that companies have been borrowing in that market instead of leveraged loans. With the Fed on hold, demand for floating-rate debt like bonds has been waning. Investors have been pulling money from loan funds for 25 weeks, but have added to their junk bond funds for much of the year, according to Lipper data.
Bankers are telling companies to take notice.
“The market is generally wide open for issuers,” said Jenny Lee, co-head of leveraged loan and high-yield capital markets at JPMorgan Chase & Co. “We’re advising issuer clients to look harder at doing high-yield bonds.”
This article was provided by Bloomberg News.