US corporate bond issuance rallies in August

U.S. corporate investment-grade bond deals set a record in August, possibly paving the way for more dividends.

Big banks aren't missing much action in the U.S. corporate debt market.

August isn't over yet, but already U.S.-marketed corporate investment-grade bond issuance has broken another record, churning out nearly $60 billion in new deals, according to financial services data firm Dealogic.

That brings this year's tally to just under $550 billion for U.S. corporate investment-grade bond issuance. At this time, the market had cranked out nearly $570 billion in funding for the most stable companies on the market.

Cycling
Matthew Childs | Reuters

Lately, activist investors have been putting pressure on companies to either weigh mergers and acquisitions or cut dividend checks and make bigger buybacks. So far this summer, recent deals between big activist investors and corporate targets include PulteGroup's decision to buy back $1 billion in shares in July, and American International Group's $3 billion move this month to buy back more stock.

In the past, some of the biggest companies in the U.S. by market capitalization capitulated and paid off hedge funds in exchange for a little peace of mind; more recently activists have had to turn their gaze to less likely sectors to juice returns — including media and financial services.

Not every company to hit up the corporate investment grade bond market has been looking to send activist investors home happy.

Some have tapped into the investment-grade bond market to instead finance M&A. For example, August issuance was in part driven by Microsoft tapping U.S. investment-grade markets to finance its $26 billion takeover of professional networking site LinkedIn.