Geopolitical conflicts have exacerbated, but rising interest rates fail to stem the tide of financing. The issuance size of investment-grade corporate bonds in the United States is approaching historical records.

Although the Middle East conflict continues to escalate, oil prices and U.S. Treasury yields are rising, and there is pressure in the private credit market, the U.S. corporate bond market remains strong this week. Data shows that this week the issuance volume of investment-grade corporate bonds in the U.S. is close to $115 billion, just a step away from the weekly historical record of about $117 billion set in the early stages of the pandemic in 2020. In 2020, the unprecedented impact of the global Covid-19 pandemic combined with the historically loose policies of the Federal Reserve led to large-scale corporate financing to deal with uncertainty. Now, against the backdrop of political tensions in GEO Group Inc, interest rate fluctuations, and concerns in the credit markets, corporate financing needs have once again increased significantly. John Lloyd, global head of multi-asset credit at Janus Henderson Investors, said: "Despite multiple uncertainties such as political risks in GEO Group Inc, interest rate fluctuations, and pressure in the private credit markets, the investment-grade bond market continues to operate smoothly, which is impressive." This week's financing frenzy was mainly driven by several mega bond issuances, including massive deals from Amazon.com, Inc. Salesforce, Inc., and Honeywell International Inc. Amazon.com, Inc.'s $37 billion bond issuance became the fourth-largest dollar corporate bond deal in global history. In addition, short-term rental platform Airbnb, Inc. Class A also entered the bond market for the first time through debt refinancing. Overall, this week saw 23 companies issuing bonds, about half the number of issuers in a record week in 2020, but due to larger individual sizes, the total issuance volume is still close to historic highs. The market had expected an issuance volume of around $60 billion, but the actual volume almost doubled, showing that investment demand remains strong. Capital inflows are an important factor supporting the market. As investors remain cautious about high-yield bonds and leveraged loans, a large amount of funds continue to flow into investment-grade bond funds. Mike Sobel, co-CEO of Trumid, an electronic fixed income trading platform, said: "The public credit market remains healthy and resilient. As long as global market volatility does not suddenly surge, the investment-grade bond market can still support large-scale financing." In fact, funds had been flowing into this market even before the outbreak of the Iran conflict. According to LSEG Lipper data, investment-grade bond funds saw net inflows of $43.4 billion in January, the highest in five years, and $32.1 billion in February. However, against the backdrop of a surge in issuance volume, the market has started to show some signs of weakness. Some companies are arranging investor conference calls before formally issuing bonds to test market demand. Meanwhile, the yield premiums on new bond issuances are generally higher than the average for this year, indicating that issuers need to offer higher returns to attract investors. For example, Salesforce, Inc.'s $25 billion bond issuance, mainly for stock buybacks, had an order book size that was only 1.5 times the issuance amount, far lower than the market's usual levels. Investor concerns about the company mainly revolve around the potential impact of artificial intelligence on the software industry and the company's practice of using debt financing for stock buybacks. At the same time, investment-grade corporate bond spreads have widened to their highest level since May 2025. According to data, investment-grade corporate bonds have fallen by 2.13% since March, and if the decline continues, it will mark the largest monthly drop since October 2024. The market expects that the pace of bond issuance may slow down next week, as companies typically reduce financing activities around the time of the Federal Reserve policy meetings. Underwriters expect issuance volume to be around $40 billion next week, including a large deal. Insiders have said that the London Stock Exchange Group held conference calls with investors on Friday to prepare for potential bond issuances. Industry insiders believe that potential borrowers will continue to adopt flexible strategies. Brett Kozlowski, portfolio manager at GW&K Investment Management, said: "Potential issuers, including large tech companies, may choose the timing and size of their issuances based on market windows. In volatile market environments, many companies will patiently wait to enter the market when demand is strong."