Question

According to WSJ article, companies like Apple, Deere, and Walt Disney recently issued new bonds on the market, totaling $27 billion offering on a single day on Sep. 3. What explains such an increased activity in a corporate bond market

Answer 1

Answer: Fall in Benchmark Interest Rates.

Explanation:

This activity was caused by a Refinancing Drive. Refinancing is when entities get a new loan with a lower interest rate and pay off the older loan with a higher interest rate so that they can pay at the lower rate.

Bond interest rates are usually fixed so when interest rates in a country fall, bond holders don't benefit from that. One option they have to take advantage of that is to go on a Refinancing Drive and issue new bonds at those lower rates and then pay off the older ones.

That is what Apple, Deere, and Walt Disney have done.