JPMorgan Asset Management portfolio manager Kelsey Berro said the investment-grade bond market is heading into a busy September issuance calendar, but demand for corporate debt remains strong and worries about the coming wave of supply may be overdone. Speaking on Monday, Berro said expectations for September issuance vary widely, with estimates ranging from $175 billion to $250 billion. She added that credit portfolio managers do not see even a $250 billion supply total as a major problem, though uncertainty around the final number makes it harder for market participants to position in advance. Berro also warned that if the market absorbs the heavy supply smoothly, investors who are still sitting on the sidelines could move back in quickly. In her words, money would "flood into the market," and any sign of stabilization could draw buyers back in size.
Odaily reported that JPMorgan Asset Management portfolio manager Kelsey Berro said the investment-grade bond market is set for a busy issuance period in September, while demand for corporate debt remains strong and concerns over a large wave of supply may be overstated.
Speaking on Monday, Berro said market expectations for September issuance span a wide range, from $175 billion to $250 billion. She said credit portfolio managers believe that even if supply reaches $250 billion, it is "not a problem." Still, uncertainty over the eventual total makes it harder for market participants to prepare ahead of time.
Berro also warned that if the market is able to absorb the heavy September supply in an orderly way, investors who are still waiting on the sidelines may move in quickly. "Money will flood into the market," she said. Any sign that the market is stabilizing could bring buyers back in large numbers.
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