Corporate Borrowing & Debt

The automaker priced $1.5 billion of sustainability bonds in three parts, its first ESG issue since 2021.

The impending barrage of T-bills is a precursor to a glut of longer-term debt issues, which might result in a "demand vacuum" for longer-maturity bonds that pushes yields higher and tightens financial conditions.

The company has issued five green bonds, including a $1 billion offering earlier this month. "Added scrutiny ... enables our platform to continue to shine compared to the rest of the market."

The trend is a sign that soaring bond yields are spurring corporations to look at ways to cut their borrowing costs.

Recent research indicates banks have put the brakes on lending to small to midsize companies.

The pullback in total lending in the last half of March was broad and impacted real estate, commercial, and industrial loans.

Lending conditions were already tightening before the banking crisis in March, and economists anticipate that access to credit will get even more difficult for businesses and households.

Debt investors losing millions on the move to SOFR are starting to fight back, requiring credit spread adjustments to make up the difference between the benchmarks.