Firms tilt towards fixed-rate bonds for borrowing as interest rates fall

Companies have increased the share of fixed-rate bonds in new bond issuances amid falling interest rates.

The net outstanding data, which reflects all outstanding bonds and not just the bonds issued during a given period, shows that over 90 per cent of the bonds were fixed-rate ones in the March, June, and September quarters.

This is the first time that it has crossed this mark since December 2017. It was 90.42 per cent in March and above 91 per cent in both June and September. The share of floating-rate bonds has fallen to low-single digits (see chart).

Companies pay interest