High-grade companies rush to tap US debt markets post-Labor Day

By Matt Tracy

(Reuters) – Top-rated companies were tapping the U.S. debt markets on Tuesday, in a widely anticipated post-Labor Day rush for financing after August’s end-of-summer lull.

At least 21 investment-grade rated companies have already announced plans to sell bonds on Tuesday morning, according to Informa Global Markets.

Among Tuesday’s deals are a two-part senior unsecured note offering from Unilever Capital Corp, three-part senior notes from tobacco company Philip Morris International and a five-part note offering from automaker Volkswagen.

September is typically the second-busiest month for U.S. debt issuance, according to credit research analysts at JPMorgan Chase, with an average issuance volume of $129 billion over the past four years outside 2020.

The post-Labor Day week has typically accounted for half of September’s IG supply, according to JPMorgan.

“The busiest day of the year is the day after Labor Day,” said Hans Mikkelsen, managing director of credit strategy at TD Securities. The rush of supply would be easily absorbed, he added.

“Given higher IG yields, you have a lot of buying interest from institutional investors,” he said.

(Reporting by Matt Tracy; editing by Shankar Ramakrishnan and Nick Zieminski)