BofA: Initial January ’24 $IG Supply Slows Vs. ’23, Still Third Briskest Pace Since ‘10

Bank of America write “investors were concerned about particularly heavy IG new issue supply in January given favorable market conditions.”

• “Instead, the $44bn priced during the first two business days of 2024 was below the $54bn issued in the same period in 2023.”
• “The deal count was also notably lower at 25 deals in 2024 vs. 32 during the same period in 2023.”
• “Given very heavy supply volumes to start the year, supply over the first two business days of January is reasonably correlated with supply for the full month. The $45bn priced over the past two days is consistent with about $146bn for the month, which is near the lower bound of our $150bn - $160bn forecast. Less heavy issuance should be supportive of IG spreads.”
• “At $44bn issuance over the first two business days of the year in 2024 is the third largest since 2010, behind 2023 ($54bn) and 2020 ($45bn). Similarly, the number of deals is also the third largest behind 2023 and 2020.”
• “Finally, the share of financial supply has been relatedly low for this period at 48% in 2024. That's down from 71% in 2023 and 87% in 2022.”