Published on 15 Nov 2024 on Benzinga
Trump's Victory Spurs $50B Corporate Bond Surge As Tax Cut Optimism Drives...
In the wake of Donald Trump’s recent election victory, companies are rushing to tap into the US bond market, taking advantage of favorable conditions. Firms such as Caterpillar Inc. CAT, Gilead Sciences Inc. GILD, and Goldman Sachs Group Inc. GS have collectively raised over $50 billion in the past week.
What Happened: The surge in corporate borrowing is driven by a rally in credit and equity markets, which has pushed borrowing costs to historic lows. Investors are optimistic about potential tax cuts boosting profits, leading to a decrease in corporate borrowing costs relative to U.S. Treasuries, reported The Financial Times on Friday. The U.S. investment-grade bond spreads were at 0.8 percentage points late Thursday, nearing their lowest since 1998.