FOMO Sweeps Bond Markets as Borrowers Look to Beat Rising Rates

As the fear of rising Treasury yields takes hold across markets, one thing has become clear to large U.S. companies: The time to borrow is now.

A jump in long-end rates to levels last seen roughly a year ago is fueling concerns that a historic window to borrow may soon be closing. That fear of missing out is pushing some firms to accelerate their debt issuance plans, whether to refinance upcoming maturities or lock in funding for acquisitions.

While borrowing costs may not be as attractive as a few weeks ago, most companies are still enjoying yields that are close to record lows. A strong economic recovery should also boost earnings and keep defaults low.

At least 11 high-grade borrowers have already announced new bond sales this week, with Bank of America Corp. and Teledyne Technologies Inc. both expected to bring multi-billion dollar transactions. Teledyne is raising funds via a five-part offering to help fund an acquisition and repay other borrowings. Junk-rated American Airlines Group Inc. is also pulling the trigger on a highly anticipated $7.5 billion debt sale backed by its mileage program to replace a loan the carrier obtained from the U.S. Treasury last year.

“Outside of Covid sectors, companies are reporting good numbers,” said Greg Zappin, a portfolio manager at Penn Mutual Asset Management. “It still makes sense for treasurers to lock in long-term financing.”

That’s not to say it will all be smooth sailing going forward. As corporate bond markets globally suffered their worst stretch of 2021 last week, Indian Railway Finance Corp. and junk-rated Vericast Corp. have both pulled bond offerings, a sign market sentiment may be already starting to shift.


After selling over $65 billion in fresh high-grade debt last week, borrowers took the day off Friday. However, sales have resumed in earnest this week with dealers calling for about $40 billion, with some banks predicting as much as $50 billion.

  • Goldman Sachs Group Inc. is evaluating what to do with about $29 billion of debt and preferred stock it issued that’s pegged to dollar Libor and doesn’t mature until after the discredited benchmark expires in mid 2023.
  • JPMorgan Chase & Co. will start quoting 20-year corporate debt using similar-maturity Treasuries on May 1, likely setting a standard date for the rest of the $1 trillion market to adopt the new benchmark.
  • Clayton Dubilier & Rice has raised the yield on a $800 million leveraged loan sale to fund its buyout of S&S Holdings amid concerns about potential competition within the clothing distribution industry, according to people with knowledge of the matter.
  • For deal updates, click here for the New Issue Monitor
  • For more, click here for the Credit Daybook Americas


Sentiment in Europe’s credit market was mixed Monday. A measure of sub investment-grade corporate credit risk reversed an earlier decline, while a similar high-grade gauge held around where it started trading.

  • New sales are underway, with five issuers set to price a minimum of 3.85 billion euros; they include lenders BPCE SFH and Credit Agricole Italia, while Australian energy company APA Group and Sanoma Corporation are among those announcing mandates
    • 40% of respondents in the Bloomberg survey expect market-wide sales to exceed EU30b, compared to 33.33% last week
  • The U.K.’s late entry to the booming green debt market will leave it struggling to catch up with European peers, undermining ambitions for London to become a world leader in environmental finance


Speculative-grade dollar bonds from Asia dropped on Monday, reversing earlier gains, as concerns about rising U.S. Treasury yields reignited a sell-off in credit amid a broader rout in risk assets.

  • The price of Asian junk debt was indicated lower by about 0.5 cent to 2 cents, according to credit traders
    • The notes of weaker borrowers are set for their biggest daily decline since September, after falling by their most since October last week, according to a Bloomberg Barclays index
  • Yield premiums on investment-grade bonds from the region also gaped wider Monday after such debt globally suffered its biggest weekly loss in a year last week

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