Large corporate supply in November

Corporate supply totaled a substantial US$63bn in November, the heaviest month for supply in 2022. YTD supply is now at US$543bn, still below previous years. Redemptions total US$267.8bn, thus 2022 net supply is currently at US$275bn. This is lower than most previous years.

We feel the USD supply will be manageable in 2023 as we expect another year of very low net supply. We forecast USD corporate supply to be no more than US$600bn next year. This is still below the average US$700bn seen in recent years. Furthermore, redemptions are up in 2023, up to US$334bn, and net supply in expected to be rather low at just US$276bn, lower than the average US$400bn.

Healthcare accounted for a substantial US$12bn last month, followed by US$9bn from Industrials and US$7bn from Utilities. TMT has seen the largest level off supply this year, with US$237bn YTD, although this is down considerably form US$211bn last year. Most sectors have seen a decrease in supply year on year, except for Autos and Industrials with a 23% increase and a 19% increase.

We forecast Reverse Yankee supply to be 38% (€15bn) lower than the normal % of US corporate and EUR corporate supply and to hit €40bn in 2023. This will still be up on this year’s c.€30bn.

Financial supply totals US$526bn on a YTD basis

Financials supply amounted to US$33bn in November, down from October’s US$43bn. Supply is now penciled in at US$526bn on a YTD basis. This is lower than the US$564bn suppled by this time last year but is still one of the highest on record years for supply. 

Bank senior supply amounted to US$31bn in November and is now totaling at a significant US$315bn on a YTD basis. This is up on last year’s US$276bn bank senior supply YTD. Bank capital on the other hand is down year on year, at US$53bn compared to US$91bn last year.  

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