Strong bid for credit drives down spreads in September
Despite a significant amount of new bond issuance, a strong bid for credit in the US caused secondary spreads to tighten last month.
Technicals have provided a strong underpinning to US credit in recent weeks, as massive demand for new issues has eclipsed supply. Secondary bond prices have been dragged along in the primary market’s wake, due to aggressive pricing of new deals and strong aftermarkets.
In the US, nearly $70 billion of high grade credit was priced in the two weeks after Labor Day, on September 6, and over $16 billion of high yield. Traders say that despite robust levels of issuance, this supply has been easily
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