Global corporate debt issuance surged to an all-time high of $8 trillion in 2024, driven by robust investor demand and declining borrowing costs, The Financial Times reported. The issuance of corporate bonds and leveraged loans rose by more than a third compared to 2023, according to data from LSEG. Companies like AbbVie and Home Depot leveraged favorable market conditions to accelerate their borrowing plans.
The record-breaking figure surpassed the previous peak in 2021, with the strong appetite for corporate debt helping to compress borrowing costs. This trend occurred even before the Federal Reserve and other central banks began reducing interest rates from multi-decade highs. John McAuley, Citigroup’s head of debt capital markets for North America, described the market environment as “firing on all cylinders, and then some.”
Borrowers were initially motivated to secure funding ahead of potential market disruptions related to the U.S. election. However, as spreads tightened further following Donald Trump’s election victory, many companies opted to front-load borrowing for 2025 as well. “Initially it was just about ‘let’s de-risk our funding for the year,’” said Tammy Serbée, co-head of fixed income capital markets at Morgan Stanley. “Then it was, ‘Actually conditions look pretty attractive, why don’t we just pull forward 2025 as well?’”
Among notable issuers, pharmaceutical giant AbbVie raised $15 billion through an investment-grade bond sale to finance acquisitions of ImmunoGen and Cerevel Therapeutics. Other major players in 2024 included Cisco Systems, Bristol Myers Squibb, Boeing, and Home Depot.
The average U.S. investment-grade bond spread shrank to 0.77 percentage points, the narrowest since the late 1990s, according to Ice BofA data. Although spreads have widened slightly since, they remain historically tight. High-yield corporate bond spreads have also widened since mid-November but continue to hover near 17-year lows.
Despite narrow spreads, total borrowing costs for companies remain elevated due to Treasury yields, with investment-grade corporate debt yielding 5.4% compared to 2.4% three years ago, The Financial Times noted. These relatively high yields have drawn record inflows, with $170 billion poured into global corporate bond funds in 2024, according to EPFR.
Dan Mead, head of Bank of America’s investment-grade syndicate, described 2024 as the busiest year for high-grade dollar borrowing since 2020, when pandemic-related stimulus triggered a debt issuance surge. “We put out an estimate for each month about what we expected supply should be… and every month the actual supply has exceeded [them],” he said.
Looking ahead, bankers expect steady borrowing activity in 2025 as companies refinance the low-cost debt issued during the pandemic. Marc Baigneres, global co-head of investment-grade finance at JPMorgan, forecasted stable activity but noted the potential for large-scale debt-financed mergers and acquisitions as a “wild card.”
However, some caution that the borrowing boom could slow if spreads widen significantly. “The market is pricing almost no downside risk right now,” said Maureen O’Connor, global head of Wells Fargo’s high-grade debt syndicate. “With spreads priced to perfection, you are seeing idiosyncratic risk pick up.”
