What are hot debt periods?

This is a time when a lot of companies issue new debt in the form of bonds. This is done to finance their operations as an alternative to borrowing from a bank.

Where have you heard about hot debt periods?

If you're interested in the markets, you may have noticed that there are periods when lots of companies issue bonds at the same time. Some observers note that this tends to happen at times when interest rates are low.

What you need to know about hot debt periods.

Companies tend to issue bonds when interest rates are low and the risk premium on corporate debt issues is low, because this gives their new bonds higher prices. While most companies can borrow from banks to raise capital, this may be seen are more expensive than selling debt on the open market. Banks also tend to place more restrictions on what a company can do with a loan, and are more concerned about debt repayment than bondholders tend to be.

Find out more about hot debt periods.

The equity equivalent is known as a hot equity period. Find out more with our guide.