Booming Bond Issuance

Bloomberg data indicate that bond issuance was very robust again last week, with companies raising $36 billion through new issuance, following $46 billion of issuance the previous week, which was the second most ever.

Two weeks prior, issuance was a tad high and the most ever. Issuance has exceeded $30 billion each week since the Bear Stearns rescue. Issuance tends to run at a pace of about $20 billion per week, so these figures stand out a great deal.

Today's issuance calendar adds to the improved picture, with roughly $9 billion of company bonds for sale. These figures, combined with decreases in credit spreads, clearly indicate that investors have moved out the risk spectrum. This will allow more money to flow through to the economy.

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Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of the revised investment classic, The Money Market, first published in 1978 by Marcia Stigum, and The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.

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