The primary market juggernaut just continues to roll as a further $12.5 billion in investment-grade volume and $1.5 billion in high-yield volume hit the market last week. This brings year-to-date investment grade volume to $45.5 billion with $19 billion of that being accounted for by supra/sovereign deals. The week was one for elephant-sized deals as GE began its annual borrowing program with $5 billion of 10-years that priced at 112 basis points and Italy launched a $3 billion 3-year deal. There is a distinct skew in the issuance pattern by rating so far this year with triple-A rated deals currently accounting for 31% of issuance versus 2002's full year total of 13%. This is relatively common as the liquid global benchmarks usually lead the market out of the gate in a new year, so we do not read the fact that the weighted average rating is now higher than at any point in 2002 as indicating a lack of risk appetite in the market.
Analysis by CreditSights, Inc., an independent online credit research platform. Call (212) 340-3888 or visit www.CreditSights.com for more information.