This isn’t going to win me the Pulitzer, but as someone who talks all day to strangers about capital markets, I’d be remiss not to mention and briefly contextualize this year’s post-Labor Day debt issuance deluge.

Expectations for September IG supply are around $120 billion this year.

If realized, total high grade issuance for 2023 would be within $20 billion of the $1 trillion mark.

The updated figure above gives you some context, where in this case that means a reminder of the extent to which the Fed’s backstop catalyzed a remarkable supply boom in 2020. The momentum carried over into 2021.

That boom is widely cited in discussions around the resilience of corporate profit margins in the face of elevated rates and what should be a decline in pricing power as consumers tire, pandemic savings buffers dwindle and so on.

Interest costs have actually moved lower in aggregate, but it’s important to note that all corporates aren’t created equal in that regard. A SocGen study suggested effective rates for small-caps are up sharply, while those for large-caps are effectively unchanged. As the bank’s Andrew Lapthorne noted earlier this summer, just 27% of S&P 500 debt is due over the next two years. That figure for the Russell 2000 is more like 60%.

In any event, this year’s September high grade supply wave comes with spreads just a handful of basis points from July’s YTD tights.

Bears of various persuasions would call that just another example of complacency.

Of course, high yield is where the trouble would show up first in the event the US economy ever does succumb to a recession that’s already two quarters “late.” I’ll save you the trouble: There’s no sign of distress there either.

The figure below shows you the 2023 flows picture.

Both IG and high yield funds saw outflows for several weeks last month amid the risk-off tone.

Also worth noting: The leveraged finance market has a $15 billion debt pipeline. Allegedly, deal activity is set to pick up going forward.