Executive Highlights

• January issuance remained exceptionally robust, with multiple heavy calendars clearing cleanly despite pronounced sector concentration. Secondary performance was broadly constructive, culminating in a peak week where nearly 90% of new tranches tightened.
• Financial issuers dominated supply throughout the month, often accounting for 60–100% of weekly volume, driven by money-center and regional bank issuance around earnings.
• Investor demand proved resilient across ratings and tenors, including BBB-heavy weeks, signaling a market willing to add credit risk when pricing and structure were appropriate.
• Yankee issuance emerged as a key swing factor, periodically overtaking domestic supply and tightening in the secondary when scarcity and concession aligned.
• Despite improving weekly returns late in the month, investment-grade performance remained modestly negative year to date, reinforcing the importance of selectivity at tight spread levels.

Primary Market Condition

The US investment-grade primary market entered 2026 with sustained momentum, as January supply printed consistently and efficiently across multiple high-volume weeks. Borrowers took advantage of spreads near cycle tights, resulting in an issuer-friendly environment that remained open even during periods of elevated calendar pressure. Dealer projections frequently pointed to continued heavy supply – often ranging from the mid-$20bn area to as high as ~$60bn in forward expectations – reflecting both opportunistic issuance and the clustering of deals around earnings and policy-related timing considerations.

While overall access remained strong, sector breadth was constrained for much of the month by earnings blackout periods, leaving financial issuers as the primary source of supply. That concentration did not disrupt execution, underscoring the depth of investor demand for well-understood balance sheets and liquid benchmark structures.

Sector and Issuer Dynamics 

Financials were the clear anchor of January issuance. Several weeks saw the sector account for the overwhelming majority of supply, including one week in which issuance was entirely financial, followed by others where financials still represented more than four-fifths of total volume. Activity was split between regional banks, issuing in the wake of fourth-quarter earnings, and money-center institutions, which printed large, market-defining transactions.

Large bank deals – particularly from Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo – absorbed size without destabilizing spreads, even during peak-volume weeks. Regional bank issuance, while generally well received, exhibited more issuer-level differentiation in secondary trading, reinforcing that January was supportive but not indiscriminate.

Rating and Tenor profile

January issuance oscillated meaningfully between quality-oriented and beta-oriented weeks. At times, single-A and higher-rated paper dominated the calendar, reflecting a more defensive posture. In other weeks, BBB-rated bonds accounted for roughly two-thirds of supply, yet still tightened in the secondary – a notable signal of risk tolerance given the already-compressed spread environment.

Tenor distribution consistently favored the front end and belly of the curve, with 5–7-year maturities emerging as the market’s most reliable clearing point. Shorter tenors benefited from carry and roll-down appeal, while longer-dated issuance succeeded primarily when supported by scarcity and strong order books rather than broad-based duration demand.

Aftermarket Performance and Notable Transactions

Secondary trading was a defining strength of the month. Even during heavy supply weeks, a majority of new issues tightened, culminating in a peak period where nearly nine out of ten tranches traded tighter shortly after pricing.

A standout example was Orange S.A.’s return to the US dollar market after a decade-long absence. The French telecom raised $6bn in a rare transaction that generated over $50bn of peak demand, including more than $13bn for its 30-year tranche alone. All tranches tightened in secondary trading, with the longest maturity leading performance.

Within the technology and communications space, both IBM and AT&T provided important reference points for investor appetite outside the financial sector. IBM returned to the market with a multi-tranche offering that traded 1–3bp tighter across most maturities, reflecting solid sponsorship and clean execution in a sector otherwise constrained by blackout periods. AT&T also tapped the market with a sizable multi-part deal; its tranches traded mixed in secondary, underscoring the market’s growing emphasis on curve point, relative value, and concession rather than issuer name alone.

Other strong performers included intermediate financial and asset-backed structures, where well-calibrated concessions and defensive features – such as call protection – were rewarded with meaningful spread tightening.

Domestic vs. Yankee issuance

Another defining feature of January was the week-to-week swing between domestic and foreign borrowers. One of the busiest weeks saw Yankee issuers account for more than half of total volume, while subsequent weeks shifted back decisively toward US-domiciled borrowers. Notably, foreign issuers often tightened more aggressively in secondary trading, benefiting from incremental concession and relative scarcity within investor portfolios.

use of proceeds and structure

Use of proceeds was predominantly general corporate purposes, typically representing roughly two-thirds to four-fifths of issuance. Refinancing activity remained a consistent secondary driver and tended to perform well, while M&A-related issuance appeared more selectively. Floating-rate note supply varied week to week, reflecting shifting views on rate exposure and investor demand. Although a small number of tranches were dropped during the month, execution risk remained contained overall.

Outlook 

Looking ahead, supply is expected to remain front-loaded around earnings and policy events, with financial issuers likely to continue leading until broader corporate blackout windows lift. As non-financial sectors return, investors should expect greater differentiation in both primary pricing and secondary performance. With spreads near historical lows, selectivity – not access – will be the dominant theme, particularly in BBB-rated and longer-dated paper.

January 2026 TOMBSTONES

AmeriVet Securities is proud to have served as Co-Manager on over $23 billion of investment grade debt in both USD and EUR for our partners across multiple sectors. AmeriVet continues to deliver high-quality global credit opportunities to our Tier II and Tier III professional investor base.