Companies raise record $400bn in first weeks of 2021
Companies have raised some $400bn in the first three weeks of 2021, marking the biggest haul of the past two decades for the comparable period.
The buying frenzy is around $170bn above the average for this time of year, the Financial Times reported, citing Refinitiv data, and is a result of global government and central bank stimulus.
The data found corporate debt and equity markets were unfazed, while countries dealt with the challenges present by the coronavirus pandemic.
Companies raised $337bn in debt markets in the three weeks to January 22 and a record $64bn through stock market flotations and secondary equity offerings.
According to the Financial Times, record-low interest rates have pushed investors to search for income in the riskiest parts of the market. Global high-yield bond issuance so far in January has hit $49.8bn – a historic high.
Meanwhile some companies are raising debt to pay chunky dividends to their owners.
A UK-based fund manager told the Financial Times: “The sense and feeling is just sheer nervousness that surrounds the market at these levels.”