There is also a weird development in some bond markets lately
Let me summarize :
- cost of financing is going higher, going forward
In Mar, Company A issued a 6% bond
In Sept, Company A issued a 6.5% bond
- Yet increment in bond price increment is even higher
In Mar, the price of the 5% bond is 100
In Sept, the first-day price of the 5.2% bond is 108
Initially 5/100 = 5% yield
Now 5.2/108 = 4.8% yield
Standard Chartered issued a 5.8% USD bond recently. It was quickly snapped up and hit nearly 110 in the first day. (10% premium)