Year to date we've had $157.5 billion of new HY bond issuance. Plus $2.1bn of investment grade bonds got downgraded to non-investment grade. That's $163.1bn of new supply in the market, pushing the overall market size to $1.32 trillion - a new record.
But it turns out that's not enough to satisfy the demand. That's because a number of HY bonds have been taken out of the market (calls, tenders, maturities). We've also had some bonds (like Ford) that are getting moved out of HY into investment grade due to upgrades ("rising stars"). In addition a large part of the HY coupon gets plowed back into HY markets while mutual fund flows continue to stay positive.
That means that year-to-date we have about $19bn more in demand than in new supply. Corporate America continues to have access to cheap credit. But uneasy about increasing leverage and with limited investment opportunities companies are not issuing enough paper to satisfy the enormous appetite for fixed income product.