Investment-grade spreads stay tight even as issuance floods the window

NEW YORK — Corporate bond desks described a familiar scramble: a large issuer announces a multi-tranche deal at breakfast and is done by lunch, concessions measured in single digits. Spreads are not behaving like a market that fears the cycle.

That tightness is a gift to CFOs and a warning to anyone who thinks credit is cheap insurance. When spreads have little room to tighten, they have a lot of room to do something else.

Real-money buyers said they are still adding, but they are adding with shorter spread duration and a livelier hedge. The bid is real. The complacency is optional.