The month of May saw the least amount of bonds sold by corporates in a decade, after a period of repeated records set for issuance. Companies issued just $66.1 billion of debt in May, the lowest since December 2000.
Treasurers must be concerned about government debt blocking their access to capital at some point, so a pullback now means there is enough confidence still to be timing the market, but perhaps also concerns about use of proceeds. If changes in monetary policy are the next shoe to drop in the economic recovery, then cheap debt can no longer be relied upon to paper over poor returns. Treasurers in both the private and public sectors want to see more cash flow and they need policy makers to come up with better ideas to make this happen.