Corporates pre-hedge future bond sales as inflation rises

Companies are making the most of low rates while they last and hedging issuance that’s years away

Risk.net montage

Corporate borrowers are rushing to lock in record-low interest rates by pre-hedging future debt issuance – in some cases five years ahead – as surging inflation sparks concerns major central banks will soon abandon their “lower for longer” mantra.

“What investment-grade corporates are really worried about is increases in inflation impacting the market’s view of where long-term yields should be,” says Amol Dhargalkar, head of non-financial corporations at Chatham Financial, which provides risk