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INVESTMENT GRADE BOND SPREADS LIKELY TO TIGHTEN EARLY IN THE WEEK

ADMIN || 8th December 2025

Healthy fundamentals and inflows are likely to keep investment-grade corporate bond spreads historically tight early this week.

The average spreads on investment-grade corporates narrowed 2 basis point last week to +78 basis points as of Thursday, according to a Bloomberg index. That’s less than a handful of basis points away from multi-decade tights reached in September.

IG bonds are supported by a 32nd week of inflows at $10 billion, according to data from Bank of America. And with 38 out of the 39 new US high-grade notes sold last week narrowing in the secondary market and stocks testing all-time highs, signs spreads can continue their recent performance are stacking up.

Syndicate desks anticipate about $15 billion of issuance this week. That’s likely to be an easy lift after a higher than expected $26.8 billion priced last week. After the week concludes, issuance will be slim as the year-end holidays set in.

The potential for volatility surrounding Wednesday’s Federal Open Market Committee meeting should inspire corporate treasurers to issue earlier in the week rather than later when spreads could reprice wider depending on the outcome for monetary policy.

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