High-Grade Companies Active Friday to Round Out $93 Billion Week  

(Bloomberg) -- Undeterred by the harshest downturn for American workers in U.S. history, companies continued to march into the debt markets for fresh funding Friday. Another nine investment-grade companies brought new bond sales, taking the week’s total to $93 billion, the most since the week ended April 3. The deals came after a report showed 20.5 million Americans lost their jobs last month, more than tripling the unemployment rate to 14.7%. Corporate debt issuance has been on a rampant pace in the U.S. with the Federal Reserve supporting the market and investors more than willing to lend. High-grade supply is running at double the pace as last year, while junk rated companies may sell more debt this month than they did in April, which was the busiest in three years. That’s prompted Barclays Plc strategists to boost their full-year supply forecasts, and high grade could set a new annual record, they said. Both asset classes are coming off of another week of inflows, with the one in investment grade being the third-largest ever. Elsewhere, European markets were subdued with the U.K. bank holiday. Asian dollar bond issuance, while quiet Friday, was otherwise strong this week, one of the heaviest weeks for sales since the coronavirus started spreading earlier this year.


The investment-grade market was unusually active, especially for a Friday and after another devastating jobs report, with nine issuers coming forward. In high yield, United Airlines is still trying to sell $2.25 billion of bonds, after hiking the yield to around 11%.
* For deal updates, click here for the New Issue Monitor
* Hertz may file for bankruptcy if lenders don’t allow it to raise new debt to pay its ABS holders
* J.C. Penney is negotiating a bankruptcy deal with lenders including KKR & Co., Ares Management Corp. and Sixth Street Partners that would slash the department-store chain’s debt in exchange for control of the company


European investors enjoyed a quieter day as the U.K. was off for a public holiday.
* In an unprecedented statement, the EU Court of Justice warned of the risks to the bloc’s legal order if national courts start openly questioning binding decisions by the Luxembourg-based institution
* Germany’s former finance minister Wolfgang Schaeuble said the German court’s critical ruling poses a threat to the future of the euro
* ECB President Christine Lagarde said the bank will “remain undeterred” in providing price stability and urged European governments to deliver a common fiscal response to the coronavirus


The broader Asian credit market was subdued Friday, and there were no new deals. It was a quiet end to one of the busiest weeks for issuance since the pandemic started spreading earlier this year.
* While the overall tone of credit markets was more positive in Asia this week, some signs pointed to the challenges that borrowers and investors still face due to the pandemic
* “We recommend investors consider short-duration bonds in the current climate to reduce interest rate, credit, and liquidity risk,” said Charles Macgregor, head of Asia at Lucror Analytics Pte Ltd

By Molly Smith and Maciej Onoszko