U.S. banks are capitalizing on the reversal in rates, and breaking sales records in the process. The firms issued $19bn of bonds maturing in 10y or more in the first three and a half months of 2021, only to flood the market with $26bn of longer-duration paper in the last four trading sessions. JPMorgan set a record with a $13bn deal on Thursday, which was smashed a day later by Bank of America which raised $15bn.
After steepening for the majority of 2021, the yield curve has bucked the trend, as longer-dated Treasury bonds have led a rally in rates across the curve in what’s known as a bull flattener. After rising to 1.75% and 2.45% about two weeks ago, the 10y and 30y yield currently stand about 20bps and 30bps lower, respectively. With credit spreads entrenched near pre-pandemic tights, the about-face in rates is creating an unexpected opportunity for nimble issuers, especially when considering the hordes that see another steepener coming on the horizon.