Supply anxiety = steeper spread curve

Research evidence excerpt

Supply anxiety = steeper spread curve

Exhibit 5: Recent new issue pricing and new issue concessions

List of new issues in the IG corporate bond market today along with performance metrics.

Date Ticker Name Tenor Size ($mn) Moody's/S&P Cpn (%) Px Spd NIC * Brk Perf Cur Spd

Note: We calculate new issue concessions by estimating the difference between new issue bond spread and interpolated G spread from comparable liquid secondary bonds of the same issuer prior to the new issue

deal announcement, adjusted for the spread impact of dollar prices deviating from par. Break performance is computed as the difference between new issue pricing and secondary closing spread on the first day of

trading.

Source: BofA Global Research

BofA GLOBAL RESEARCH

Daily dealer inventories update

Below we estimate dealer inventories for the IG corporate bonds based on TRACE data.

The actual inventories of US issuer bonds based on NY Fed survey, as well as the

estimated change since the latest Fed report are plotted in Exhibit 6. We estimate the

corresponding DV01 equivalent in Exhibit 7. More details by sector and maturity are

available in Exhibit 8 and Exhibit 9. Finally, note that the data for the current date is

through about 4:40 p.m. Eastern Standard Time.

Exhibit 6: Estimated dealer inventories of IG corporate bonds since Jul-2025.

We estimate IG dealer inventories of US issuer bonds increased to -$0.8bn currently on Jul-20 from -$6.8bn

on Jul-08. Since Jul-2025, dealer inventories have fluctuated but generally stayed negative.

0 US issuer IG actual US issuer IG estimated

(mn)

-5,000

inventories -10,000

dealer

-15,000

IG

US

Note: data for US issuer bonds only, maturities 13M or longer. Actual dealer inventory data is from Primary Dealer Statistics survey by the

NY Fed.