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U.S. Junk-Bond Sales Break Record for Busiest Quarter Ever

U.S. Junk-Bond Sales Break Record for Busiest Quarter

*(Bloomberg) -- U.S. high-yield debt sales set a new quarterly record as companies take advantage of low funding costs before potential inflation causes rates to rise further.

Carvana Co. launched $600 million of notes Thursday, which pushed issuance over the mark to $139.6 billion for the first quarter. That surpasses the previous high of about $139 billion set in the second quarter of 2020, when businesses rushed to raise liquidity at the start of the Covid-19 pandemic, data compiled by Bloomberg show. MGM China Holdings Ltd., Interior Logic Group -- issuing through Signal Parent Inc. -- and Dycom Industries Inc. set sizes for their deals earlier in the day to help drive volume past the record.

Junk-rated companies have tapped the market relentlessly this year, extending 2020’s record pace as yields have stayed relatively low, at least for now. A $1.9 trillion debt-funded stimulus package and inflation expectations have been pushing Treasury yields higher, encouraging corporations to take advantage of borrowing conditions that are still attractive.

Risky borrowers, including those such as retailer Neiman Marcus Holding Co. Inc. that only recently emerged from bankruptcy, have tapped the market, while there’s also been a pick-up in leveraged buyout funding after a swath of refinancings this year. Ingram Micro Inc. is in the market with a $2 billion offering to support its acquisition by Platinum Equity, following similar deals from Triton Water Holdings Inc. and Interior Logic Group.*

Thoughts many folks were calling staring junk bonds bear. Very difficult to tell when Feds keep pumping and keeping rates low
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