Issuance ultimately fell short of expectations this week, with 15 borrowers combining to raise $20.05bln against a $27.5bln average estimate from syndicate desks.

Despite the lighter-than-expected total, April has now cemented itself as the second busiest on record, an impressive outcome following a record-breaking first quarter. The broader theme remains intact, with primary markets continuing to show a willingness to absorb supply despite the ongoing uncertainty tied to the Iran conflict.

Much of the month’s typically FIG-heavy supply appears to have been front-loaded ahead of key geopolitical developments, a pattern seen repeatedly throughout the conflict. That said, strong investor demand for high-quality paper, alongside solid earnings from the financial sector, has also played a meaningful role in supporting issuance.

The week followed a familiar script:

Monday saw a steady mix of issuance, with four investment-grade FIG borrowers joined by a Yankee industrial and a split-rated utility raising $6.75bln. That was followed by a quieter Tuesday, when four borrowers — including Yankee names from Australia and Kazakhstan — raised $3.7bln, bringing the weekly total to $10.45bln. Conditions remained favorable, with deals generally well supported.

After a midweek lull that saw just one transaction from Blackstone Private Credit Fund, a late push on Thursday brought weekly volume to $20.05bln. While still short of the $27.5bln estimate, the month-to-date total of $118.9bln has already surpassed expectations, suggesting some supply was effectively pulled forward.

Thursday’s activity was anchored by AT&T’s $6bln five-part offering, which priced 27bp-30bp inside IPTs on $21bln in orders. Additional issuance included $1bln from John Deere Capital, $1.1bln from Jefferies, and $650mln from Aircastle, with execution across the slate remaining firm as demand held steady.

The broader macro backdrop remained constructive to end the week.

Equity markets shrugged of geopolitical nerves and higher oil prices as tech shares led the Nasdaq to a fresh record high. The Philadelphia Semiconductor Index also posted all-time highs after rising for an unprecedented 18th consecutive trading day.

Robust corporate earnings and solid employment and manufacturing data this week have allowed investors to continue looking past the Iran war to a successful economic outcome.

Sentiment got an additional boost from a decline in interest rates after news that the US Attorney for DC was dropping the criminal probe against Fed Chair Jerome Powell, paving the way for Kevin Warsh (dove) to be confirmed and seated as head of the Fed next month. See: https://www.informagm.com/stories/2226557

The outlook for next week points to a pickup in activity, with syndicate desks forecasting roughly $29.5bln of supply. The easing of earnings blackout periods should help support issuance and allow for a more diverse mix of borrowers beyond the financial sector.

Intel and CBRE Group are among those preparing to come to market, having completed investor calls today, leaving them well positioned to issue early next week.

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