Perhaps Wall Street analysts spoke too soon when they predicted2017 would mark the slowdown of an unprecedented boom in corporatecredit. Last month, bankers and investors told Bloomberg's ClaireBoston that they expected U.S. investment-grade bond sales tofinally slow after six consecutive years of unprecedented issuance.But the exact opposite seems to be happening, at least if the firstfew days of 2017 are any guide. Debt sales are accelerating, withthe biggest volumes of issuance ever for the first week of January,according to data compiled by Bloomberg.

And investors are showing as muchappetite for the bonds as ever. They poured $2.3 billion into U.S.investment-grade bond funds over the past week, the biggest flowsince early October, according to Wells Fargo Securities.

This may just be a blip leading to a gradual slowdown in sales,but there are several reasons 2017 may be another banner year forinvestment-grade sales: 1) Money has been cheap for years, with theFederal Reserve holding benchmark overnight rates at zero. But thattime appears to be ending, for real this time because wages areincreasing and inflation is returning. The Fed is planning to raiserates several times this year, and 10-year Treasury yields havebeen generally rising. So companies may want to lock in the lowrates while they can.

Why not borrow money while investors are basically throwing itat you? Average investment-grade yields in the U.S. are 3.7%,compared with a decade-long average of 4.6%.

Ron Quigley, head of fixed-income syndicate at MischlerFinancial Group, predicts a big month ahead for January, with up to$160 billion of sales, which would be a record.Others surveyed by Bloomberg are expecting about $112 billionof such debt sales this month, below last year's $134.9 billion inissuance for January, according to data compiled byBloomberg.

2) Companies are still planning mergers and acquisitions, andthey're borrowing money to do so. Even though there are fewermegamergers on the horizon, private equity firms have some bigplans. These investors appear determined to put cash to workregardless of the relatively high valuations, according to myfellow Gadfly columnists Brooke Sutherland and Gillian Tan. Andsome of these companies likely have speculative-grade ratings,giving a boost to potential high-yield bond issuance. There's stillclearly demand for such debt, which gained 0.9% in the firstthree trading days of the year alone, building on last year's17.5% return. If the debt keeps rallying and yields keepfalling, more of these companies will come back to the market.

3) The U.S. economy doesn't appear to be headed for a recessionsoon, meaning that investors will be more willing to keep lendingto corporations. In fact, given the widely held belief thatTreasury yields are going to be rising, some investors may prefercorporate bonds to government debt because corporate credit offersa cushion of extra yield to buffer from potential losses. Thiscushion of extra yield is still above the pre-crisisaverage.

Of course, the more debt these companies sell, the more painthere is to go around when the credit cycle does finally turn. Butfor now, the party's still in full swing, with the hangover just adistant prospect.

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