กรุงเทพฯ--25 ส.ค.--Standard & Poor's
Weak economic activity around the globe has helped to maintain an accommodative monetary policy. And, with expectations for subdued inflation, interest rates remain low and many programs designed to spur activity are still in place. This, together with investors' waning confidence in the economy, has helped push Treasury prices up and yields down, said an article published today by Standard & Poor's, titled "Growing Concerns About The Economy Could Curb The Recent Surge In Issuance."
"Nevertheless, there is still strong demand for corporate debt at both the investment-grade and speculative-grade levels," said Diane Vazza, head of Standard & Poor's Global Fixed Income Research. "And although the less-than-ideal market conditions are causing some hesitance among corporate investors, investors have to put their capital to work, and the better yields seem difficult to resist."
Companies have embraced this as an opportunity to raise funds in order to expand their businesses, refund or prefund debt, or even undertake dividend recapitalizations. Moreover, expectations for a prolonged and sluggish economic recovery, or even another downturn by some, as well as a rising cost of borrowing have encouraged many entities to tap the bond markets for extra liquidity. New global corporate bond issuance in 2010 (through July 31) totals $1.34 trillion, of which $831 billion is investment grade, $159 billion is speculative grade, and $353 billion is not rated.
New bond issuance in the first quarter of 2010 was robust. However, fiscal problems in Europe hampered issuance in the second quarter. New bond issuance then rebounded in July and August, but the cumulative total in 2010 remains below the 2006 level.
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Media Contact:
Mimi Barker, New York (1) 212-438-5054,
[email protected]
Analyst Contact:
Diane Vazza, New York (1) 212-438-2760