The Bond Boom

The boom of bond releases in 2019 has been widespread. In Q3 of this year, The Economist published an article stating that a wide spectrum of originators, from both emerging and developed markets, were issuing global bonds in an economic environment marked by interest rates that have stayed low for an unexpectedly long time.

This news came hot on the heels of the Financial Times documenting in mid November the fact that corporate bond issuance set a global record back in the week of September 6th 2019. In a single week companies raised $140bn globally.

The 2019 boom in corporate bond issuance has been driven by both historically low funding costs and a move away from the traditional sources for funds. Raconteur reported 20% of total global corporate debt is in the form of bonds, nearly double that of 2007, in a specialist report published with The Sunday Times and other partners in mid-November.

As more money flows into the asset class, their popularity has become more mainstream. Raconteur reports that this is most evident with fintech companies working in this expanding digital marketplace. By consequence, the finance sector is transgressing from a climate whereby corporate bonds were once considered as a preserve for fund managers and large institutions, tech platforms are now encouraging access to a wider market.

Due to the evolution of digitisation of financial services and the current landscape of low interest rates, corporate bonds are becoming an increasingly attractive solution for investors who are searching for an alternative to often volatile equity markets and traditional savings products.

Linear is at the forefront of this developing market focusing on listed asset backed products available to sophisticated investors and institutions. Jerry Lees, Chairman of Linear Investments, commented: “Based on client demand, Linear has made a strategic decision to work with our corporate clients to bring high yield, asset backed corporate listed bonds to the market.  These will be available for distribution to appropriately qualified investors looking for a higher yield returns covered by secured assets in a marketplace where yields are under pressure, or at risk everywhere else.”

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