Remarkably strong demand for high-grade bonds brought spreads to the narrowest since November 2021 and resulted in $60.3 billion in volume.

The sale indicates investors want to buy bonds that fund acquisitions, a form of debt they largely avoided last year.

One $95 billion asset manager is bracing for bond yields to gyrate and for high borrowing costs to weigh on corporate earnings.

With governments and development banks dominating sales, the global market for green, social, sustainability, and sustainability-linked bonds reached $150 billion last year.

"We could easily see $200 billion of sales this month."

Meanwhile, green bonds, whose proceeds can be used only for specific projects, had their second-busiest year ever.

Issuers rushed to borrow to fund sustainability-linked initiatives ahead of the usual December slowdown.

"Once we get through this wave, there's not going to be much remaining supply for the rest of the year."