Walmart and McDonald’s kick off post-Labour Day borrowing spree

Bloomberg

The expected post-Labour Day high-grade borrowing rush is underway, with Target Corp, Walmart Inc, McDonald’s Corp, Lowe’s Cos, and Nestle SA among the companies tapping the US investment-grade market.
Eighteen issuers are selling new debt, with more deals possible. Companies are rushing into the market despite increasing volatility and higher borrowing costs over the last several weeks. Syndicate desks say there’s a desire to lock in funding needs ahead of the Federal Reserve meeting later this month.
“There’s a catalyst to go at the beginning of the month with the FOMC on the 21st and a number of folks trying to go ahead of the inflation print on the 13th,” said Teddy Hodgson, co-head of global investment-grade syndicate at Morgan Stanley. “We think the first two weeks of September might be equally busy.”
The issuance backdrop is fair, with a measure of credit risk, the spread on the Markit CDX North American Investment Grade Index, tightening 2.39 basis points to 89.6 as of 9 am New York time. The spread
declines as credit risk drops.
Wall Street is expecting around $50 billion of bond sales this week and $150 billion for the month of September, according to an informal survey of debt underwriters.
Mondelez International Inc., John Deere Capital, Dollar General Corp., and Union Pacific Corp. had also started bond sales as of 8:45 am New York time.