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May Credit Snapshot

In May, the credit markets saw a new issue calendar that came in significantly lower than monthly expectations, as spreads moved tighter and mounting concerns around inflation triggered broad market volatility.

Supply of $86.5 billion disappointed closing -36% below the dealer projection of $135 billion. The U.S. Treasury market was steeper by 54 basis points, as U.S. inflation has the markets on notice.

Spreads traded in a 20-40 basis point range, as the markets deal with volatility from all directions. May saw very strong secondary activity but was heavily weighted with net client selling of over $12.3 billion, as the new issue calendar disappointed despite May being a historically heavy month.

We also saw continued volatility as quarterly earnings wrapped up and equities continue to see big swings, along with soaring energy prices and daily volatility in U.S. Treasuries – all creating a difficult market for fixed income issuers, investors and traders to navigate.


Issuance Stats

IG (ex-SA) Total


$ 86.5 billion


$647 billion

Supply Run Rate

IG Gross (ex-SSA)



$647 billion (-5%)


$683 billion


IG credit spreads for May were 10-35 basis points tighter and traded in a wide range for the month (20-40 basis points) closing at the month tights. 

The U.S. Treasury market steepened with the 2yr note rallying -20 basis points lower, the 10yr -14 basis points lower and the 30yr unchanged. When looking at U.S. Treasury rates, we saw the month begin with 2’s — 10’s at +26 basis points and 2’s — 30’s at +34 basis points, closing the month with 2’s — 10’s at +32 basis points and 2’s — 30’s at +54 basis points.  

The Fed set the tone early in the month, with another 50-basis point rate hike, as soaring inflation and global market volatility has created a difficult environment for market participants to navigate.

The CDX index began the month at 83.48 on May 2, had a brief rally to 78.70 on May 4 and traded higher to 90 on May 9. As mid-month volatility spiked, the level peaked on May 18, bringing the CDX index to 91.4.

We saw a broad rally into the end of May, which narrowed the spread to 79.52 on May 27, before closing at 79.92 on May 31.

The Bloomberg Barclays U.S. Aggregate Average OAS opened the month at 1.38 and traded to the monthly high of 1.49 on May 20, before steadily moving tighter, to close at 1.30 on May 31.  

The average high-grade corporate bond spread hit a 16-year low of 0.80 basis points back on June 30, 2021.

See the charts below for more information.

U.S. Treasury Moves

December 31, 2021 – May 31, 2022

2yr U.S. Treasury

10yr U.S. Treasury

30yr U.S. Treasury

December 31 0.73% December 31 1.52% December 31 1.90%
January 3 0.78% January 3 1.63% January 3 2.01%
January 18 1.06% January 18 1.87% January 18 2.18%
January 31 1.18% January 31 1.79% January 31 2.11%
February 1 1.18% February 1 1.81% February 1 2.19%
February 15 1.58% February 15 2.05% February 15 2.37%
February 28 1.46% February 28 1.86% February 28 2.19%
March 1 1.31% March 1 1.72% March 1 2.11%
March 15 1.85% March 15 2.15% March 15 2.49%
March 31 2.28% March 31 2.32% March 31 2.44%
April 1 2.44% April 1 2.40% April 1 2.44%
April 14 2.47% April 14 2.66% April 14 2.92%
April 29 2.70% April 29 2.85% April 29 2.96%
May 2 2.73% May 2 2.99% May 2 3.07%
May 16 2.58% May 16 2.88% May 16 3.09%
May 31 2.53% May 31 2.85% May 31 3.07%

CDX Investment Grade Index

CDX Investment Grade Index

Bloomberg Barclays U.S. Aggregate Corporate Average OAS 

January 1, 2021 – May 31, 2022

Bloomberg Barclays U.S. Aggregate Corporate Average OAS 

September 1, 2002 – May 31, 2022


IG credit flows came in at a strong $549 billion vs trailing months, with April of this year at $541 billion, March at $630 billion, February at $489 billion, January at $483 billion and the December 2021 low of $372 billion. The trailing six-month average volume is $510 billion.

May’s lighter than expected new issue calendar and tighter spreads had clients selling paper at the fastest rate of the year so far, which led to over $12.3 billion of net client selling.

We saw investors reluctant to put money to work, as the front end of the credit curve saw the lion’s share of net client buying, with 0-1yr paper seeing over $574 million of net client buying, while the 12yr and longer saw just $281 million of net client buying.

The belly of the credit curve saw net client selling, with 3-7yr paper leading the charge, seeing over $7.9 billion of net client selling. In addition, 1-3yr paper saw $4.2 billion of net client selling and 7-12yr paper saw $1.7 billion of net client selling.

The financial sector dominated net client selling in May, with over $5.2 billion, followed by energy at $1.6 billion, health care at $1.3 billion, consumer discretionary at $1.3 billion and technology at $957 million.

All sectors saw net client selling, except for communications, which saw light net client buying of $86 million. From a ratings perspective Baa1/Baa3 saw over $7.8 billion of net client selling, along with A1/A3 seeing over $3.7 billion of net client selling.

See IG Credit Flow charts below for more information.

IG Credit Flows by Sector

May 2022

IG Credit Maturity Flows

May 2022 

IG Credit by Investment Grade Ratings

May 2022


May saw a new issue calendar that missed monthly expectations by 36%, steepening U.S. Treasury trade, solid secondary trading flows and massive net client selling, despite spreads moving tighter on the month.

The U.S. Treasury curve steepened by 54 basis points as 2’s and 10’s saw a solid rally, and the long bond stood pat at 3.07%.

As we move into June, with the next Fed move expected on June 15, Chairman Powell has his work cut out for him – along with the Fed governors, as they navigate inflation and Fed rate hikes.

In a recent Transitory meeting at the White House, Chairmen Powell, President Biden and Secretary Yellen all admitted they were wrong on inflation and were slow on the steps to curb it.

Tough times remain ahead, as gas prices and inflation continue to create major roadblocks for consumers.

We were expecting $135 billion of new supply in May, which is historically a big new issue month – and that came in well below expectations, at $86.45 billion. The credit markets have seen heavy secondary trading flows, tighter credit spreads amidst massive market volatility which has led to bigger new issue concessions and a repricing of secondary trading levels along with wide ranges on the month.

June opens with all eyes on inflation, gas prices, Friday’s unemployment data and the Fed’s next move. This is expected to be a solid deal month, with projections coming in at $25-30 billion for the first week and $90 billion for the month.

June has seen volume of $112.7 billion and $169 billion in the past two years, respectively.

Great job by the AmeriVet Securities team in May, as we were a co-manager on a $3.6 billion five-part deal for Pacific Gas and Electric Wildlife Recovery deal, co-manager on a $700 million deal for Xcel Energy Inc., co-manager on a $1.1 billion deal for Vistra Operation, co-manager on a $1 billion two-part deal for AEP Texas, co-manager on a $350 million deal for Peco Energy, co-manager on a $1 billion deal for HSBC USA, co-manager on a $3.5 billion two-part deal for HSBC Holdings, co-manager on a $750 million 10yr deal for KKR Group Finance Co XII and joint lead manager on $3 billion three-part deal for UBS Group.

In addition, we were senior co-manager on a $500 million deal for Deutsche Bank AG/NY, as well as senior co-manager on a $2 billion two-part 3NC2 FXD and FRN deal for Citigroup.

The Amerivet Securities sales team continues to bring in large volumes of differentiated orders from Tier II and Tier III accounts on new issue deals.