Dollar funding has been and remains an unshakeable pillar of international capital markets. It still stands as the most solid global funding ground, in the face of all the volatility stemming from the war in Iran.
As of last week, dollar corporate bond issuance in March amounted to $186bn, while financial institutions had issued $52bn, according to Dealogic.
Despite all the market stress, the FIG total was not far off the $56bn printed in March 2025. And the corporate volume was within striking distance of the all-time monthly issuance record of $197bn in March 2020.
While this spate of borrowing may have betrayed anxiety — with companies rushing to raise money as they did at the height of the Covid-19 pandemic — it also shows the dollar market's unrivalled ability to provide that financing.
This is in sharp contrast to the sentiment towards the US and the dollar just before the war in the Middle East erupted.
Between President Trump's announcement of swingeing tariffs in April last year and his attack on Iran this March, both issuers and investors of bonds outside the US had shown keen interest to increase their share of non-dollar debt.
All the talk was about shorting dollars and moving into other currencies, to reduce reliance on the US financial system.
These arguments may still hold in the long run. This need not only mean a Keynesian very long run in which “we are all dead” — but their fulfilment does lie in the future.
The market of the present — which will undeniably finance and stabilise economies in the near term — is dollars.
Size and certainty
As soon as stress from the inflationary dangers of the war appeared, sending interest rates sharply higher and equities lower, the dollar market shone, demonstrating its impeccable ability to provide funding to diverse issuers, domestic and international.
Uncomfotably for those short the dollar, demand for it spiked, reflected not only in the foreign exchange market but in borrowers’ shift to secure funding in the US currency.
Diversification is a prudent strategy and the search for new markets goes on, but no one is purposely avoiding issuing in dollars now.
Even when domestic and local markets can provide the cheapest cost of funding, most of them are not big enough to fulfil global companies’ needs. Especially not if they operate in the US, still the world’s largest economy.
No other currency enables issuers to reliably raise multiple billions, even in the midst of volatile markets that have increased execution risk.
Dollar investors are a broader community with deeper pockets, and have a tendency to keep buying in the primary market through times of crisis.
As long as they are compensated with higher new issue premiums, US investors will be willing to play. Not many markets can say the same.
Tapping into this certainty was KfW, which issued a $4bn 3.2 year May 2029 Global bond as early as March 10.
A week later HSBC went Stateside for the most subordinated bank debt, printing $2.5bn of SEC-registered additional tier one capital bonds, which drew a $17bn book.
And even if it shunned US demand, a day later Danske Bank swept offshore dollar accounts with its $500m AT1, demonstrating the broad international investor demand for dollar paper.
For funding security and execution certainty, the dollar bond market remains the backbone of financing.