ewsba.se
Corporate bond market liquidity is showing strong signs of expansion across both the United States and Europe, driven by more frequent trading in a broader range of individual debt securities from blue-chip issuers.
In the US investment-grade market, concentration in top-tier debt has softened noticeably. A company’s top three bonds represented approximately 35% of overall trading volume in that firm's securities as of this month—marking a five percentage point drop compared to January 2023, according to Barclays strategist Zornitsa Todorova. A similar broadening of trading activity occurred in European credit over a span of roughly three and a half years.
The shift toward broader trading activity is predominantly occurring within investment-grade bonds. In contrast, high-yield credit markets continue to see trading volumes heavily concentrated in a small number of issues. Major technology firms—commonly referred to as hyperscalers—also mirror this concentration, with trading activity remaining focused on only a select few debt instruments.
As trading activity spreads across a wider selection of a firm's outstanding debt, institutional investors gain greater operational flexibility to express specific yield-curve or maturity views. Additionally, this dispersion could contribute to a reduction in the liquidity premium traditionally associated with buying less frequently traded securities.
“As trading activity extends beyond benchmark issues, the valuation gap between on- and off-the-run bonds may narrow, creating a more efficient and liquid issuer ecosystem,” Todorova wrote.
Trading liquidity within corporate issuers remains fluid, particularly following new debt issuances. Within the investment-grade segment, an issuer's most heavily traded bond maintains a greater than two-thirds chance of remaining among its top three most active securities one month later. However, after a three-month period, that probability declines to 55%.
For about a decade, Livemint—News Desk has been a credible source for authentic and timely news, and well-researched analysis on national news, business, personal finance, corporates, politics and geopolitics. We bring the latest updates on all the listed companies on BSE and NSE, startups, mutual funds, Union ministries, geopolitics, and untapped human interest stories from around the world, helping our readers to stay informed on the latest developments around the globe. Our Coverage Areas 1. Companies: Comprehensive news and analysis on listed and unlisted companies, corporate announcements, corporate chatter, C-suite, business trends, hiring alerts, layoffs, work-life balance, world's top billionaires and richest and more. 2. Personal finance: Insights into mutual funds, small savings schemes like - PPF, SSY, post office savings scheme, stock to watch, personal loans, credit cards, top bank FDs, real estate, income tax and more. 3. Politics: Comprehensive coverage of general elections, state elections and bypolls, Lok Sabha, Vidhan Sabha, Parliament, PMO, PIB, finance ministry, home ministry, among other union ministries and government departments. 4. National News: From metro cities like Delhi, Mumbai, and e to untapped stories from rural India, we cover human interest, health, education, crime and courts, and law and order, among other areas of public interest. 5. Economy: In-depth analysis of India's macro and micro-economic indicators like- GDP, inflation, forex, fiscal deficit, current account deficit, interest rate cycle, economic recovery, RBI circulars, indirect taxes, GST, Insolvency and Bankruptcy imports, exports and everything that impacts Indian economy. 6. Geopolitics: Well-rounded and deeply researched coverage on US News, Oval Office European Union, Ukraine Russia War, middle-east crisis, royal families and global leaders like - Donald Trump, Vladimir Putin, Kim Jong Un, Xi Jinping and premiers of other leading economies in the world. Meet the Team 1. Gulam Jeelani, Political Affairs Editor 2. Sugam Singhal, Senior Assistant Editor 3. Chanchal, Assistant Editor 4. Sanchari Ghosh, Chief Content Producer 5. Pratik Prashant Mukane, Chief Content Producer 6. Sayantani Biswas, Chief Content Producer 7. Ravi Hari, Deputy Chief Content Producer 8. Garvit Bhirani, Deputy Chief Content Producer 9. Akriti Anand, Senior Content Producer 10. Jocelyn Felix Fernandes, Senior Content Producer 11. Swastika Das Sharma, Content Producer 12. Mausam Jha, Content Producer 13. Riya R Alex, Trainee Content Producer
Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.