With both central banks and market participants actively purchasing corporate credit, corporate CFOs have been provided with an (almost) free buffet for corporate debt issuance and refinancing. This is especially true in the U.S., where issuances have reached the highest amount in recorded history. From a global perspective, it is rather clear that most CFOs tried to take advantage of the inelastic demand for traded corporate credit (especially within the BBB and BB segments) with the main purpose of refinancing and extending their existing debt commitments.

The biggest beneficiaries of the unprecedented support by central banks have been so-called fallen angels. As of today, the face value of the global fallen angel market has more than doubled, raising some questions about the long-term debt sustainability of those specific issuers.

Despite Central banks’ early intervention, capital market participants remain the key players in the funding of U.S. and Eurozone corporate balance sheets, leaving the asset class at the mercy of investor sentiment and market volatility.