The Resilience of the U.S. Corporate Bond Market During Financial Crises

Bo Becker and Efraim Benmelech

No 28868, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Corporate bond markets proved remarkably resilient against a sharp contraction caused by the 2020 Covid-19 pandemic. We document three important findings: (1) bond issuance increased immediately when the contraction hit, whereas, in contrast, syndicated loan issuance was low; (2) Federal Reserve interventions increased bond issuance, while loan issuance also increased, but to a lesser degree; and (3) bond issuance was concentrated in the investment-grade segment for large and profitable issuers. We compare these results to previous crises and recessions and document similar patterns. We conclude that the U.S. bond market is an important and resilient source of funding for corporations.

JEL-codes: E43 E44 E51 G01 G21 G23 (search for similar items in EconPapers)
Date: 2021-05
New Economics Papers: this item is included in nep-cba, nep-cfn, nep-fmk and nep-mac
Note: CF EFG ME
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Citations: View citations in EconPapers (9)

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