Canadian new debt offerings are flying off the shelves, breaking all-time records early in the year.
To date in February, $8.4-billion has been issued, a high for the month. On top of that, $19.5-billion has been sold since January 1, making this the fastest pace of issuance up to this point in any year.
Why so much issuance? 2012 is full of maturities, and a lot of companies are refinancing while the market is hot. For proof of that, just look at last week when Bank of Nova Scotia, Enbridge Income Fund and Epcor Utilities financed, raising $2.3-billion collectively. All three deals were upsized.
At this point, no one is quite sure how long it will last. As Desjardins Securities points out: “While the street is generally ‘clean’ in credit at the moment it only takes a hint of a new Euro crisis for liquidity to dry up and spreads to widen.”
But for now, soak it up while you can, fixed-income desks.