Investment-grade market quiets ahead of year-end; high-grade corporate outflows soar

By Cristal Cody

Tupelo, Miss., Dec. 23 – Primary action in the investment-grade bond market quieted as market participants take off for the holidays and look toward an expected busy January deal pipeline.

Little activity was seen in the space over the week ahead of Christmas and not much else is expected for the remainder of the year, sources said.

Less than $8 billion of high-grade bonds were brought to the market so far in December, short of market forecasts of about $25 billion of volume for the month.

January is expected to be strong with about $130 billion of supply to as much as $150 billion anticipated, according to market sources.

Corporate deal volume in January 2022 totaled about $150 billion, sources report.

Meanwhile, outflows returned in a big way to the high-grade market this week.

Outflows high

High-grade corporate investment funds saw outflows of $6.09 billion in the past week ended Wednesday, according to Refinitiv Lipper US Fund Flows.

Funds had inflows of $177 million in the week prior and $1.2 billion of inflows in the previous week.

Corporate investment-grade funds were headed toward the year’s end with around $125 billion of net outflows.

Outflows of $14.42 billion also were reported over the past week ended Wednesday for all taxable bonds, bringing the rate of outflows for the $3.5 trillion sector to $7.25 billion a week, Refinitiv Lipper US Fund Flows said.

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