Roll up, roll up for the great blue-chip corporate bond sale!


If there was a storefront for the corporate bond market at the moment, it would likely to be plastered with hyperbolic signs for the sale of a lifetime.

“10 per cent off all bonds!” one sign might read. “Close to 40 per cent off blue-chip company debt!” another could say. When will this sale end? Probably only once we get closer to a recession.

Until then, we are left with a curious situation in which the market value of bonds issued by the likes of Alphabet, the Google owner and one of the most highly rated companies in the world, is trading lower than the average price of the most lowly rated bonds available.

Alphabet’s bond maturing in almost 30 years’ time in 2050 can be bought for about 65 cents on the dollar. What a bargain! That is a 35 per cent discount from when the bond was issued with a record low coupon in August 2020.

Investors can buy Alphabet bonds for the same price as the debt of much lower-rated companies such as WeWork…

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