From Yahoo Finance: 2025-03-28 06:07:00

The pipeline for U.S. high-grade corporate bond issuance for mergers hits a five-year low due to Trump’s trade war. Expectations of $250-300 billion in investment-grade bonds to fund deals are dashed, with only $8 billion in acquisition financing currently in the pipeline. M&A volume fell 3% in Q1, causing economic uncertainty.

Investment-grade bond issuance volumes projected to average $1.65 trillion in 2025, up $150 billion from the previous year. However, experts fear a tighter credit spread due to lower issuance for deals. The M&A slump may impact banks’ profits and jobs in the industry. Investors are expected to receive nearly $1 trillion this year.

Credit spreads have tightened by nearly 6 basis points but remain 14 points away from their lowest levels in over a decade. Without a surge in bond issuance for M&A, spreads may stay tight or narrow further. A recession appears unlikely in the medium term due to Trump’s policies, but growth is expected to slow.

Expectations for bond issuance have plummeted after a promising first quarter. In March, $49 billion was raised by investment-grade companies for acquisitions, including large offerings for Mars and Synopsys. However, the pipeline has dried up, with volatility hindering dealmaking activity. The delay in new M&A progression is attributed to macroeconomic uncertainty.



Read more at Yahoo Finance: Analysis-Deal slump hits US high-grade bond supply, pressures spreads