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8 December, 15:21

According to WSJ article, companies like Apple, Deere, and Walt Disney recently issued new bonds on the market, totaling $27 billion offering on a single day on Sep. 3. What explains such an increased activity in a corporate bond market

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  1. 8 December, 15:24
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    Answer: Fall in Benchmark Interest Rates.

    Explanation:

    This activity was caused by a Refinancing Drive. Refinancing is when entities get a new loan with a lower interest rate and pay off the older loan with a higher interest rate so that they can pay at the lower rate.

    Bond interest rates are usually fixed so when interest rates in a country fall, bond holders don't benefit from that. One option they have to take advantage of that is to go on a Refinancing Drive and issue new bonds at those lower rates and then pay off the older ones.

    That is what Apple, Deere, and Walt Disney have done.
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Home » Business » According to WSJ article, companies like Apple, Deere, and Walt Disney recently issued new bonds on the market, totaling $27 billion offering on a single day on Sep. 3. What explains such an increased activity in a corporate bond market
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