Barclays has concluded that competition in the U.S. primary credit markets has reached its highest level on record, based on an analysis of more than one million investor records going back to 2017. The bank built its dataset from the Financial Industry Regulatory Authority's Trade Reporting and Compliance Engine, known as TRACE, and attributes the trend to a notable increase in demand for new corporate bond issuance.
The surge in demand has translated into tighter allocations for new issues and more active trading soon after securities are issued, Barclays found. The dataset shows that new issuances have increasingly "sold out" to a wider and more diverse set of investors, a shift Barclays links to both structural and cyclical factors.
Among the forces cited are a larger pool of funds competing for allocations to new issues, stronger foreign demand for U.S. corporate debt and higher coupons following the Federal Reserve's 2022 rate liftoff. Those higher coupons, Barclays says, have raised reinvestment needs and intensified competition for primary allocations.
Quantitatively, Barclays reports that competition in the first half of 2025 was about 15% higher in investment-grade debt and roughly 30% higher in high-yield debt compared with 2017, a year the report notes was already regarded as highly competitive. The steepest increases were concentrated in the most liquid parts of the market, where competition rose by roughly 30% to 35%.
That jump in competitiveness was observed across major sectors and issuance characteristics, including banking, capital goods, consumer non-cyclical, consumer cyclical and technology. It was also most pronounced for large offerings and bonds maturing in the five- to ten-year range.
Barclays further notes that unmet demand in the primary market is propelling activity in the secondary market. For deals larger than $1 billion, turnover in the first 10 days of 2025 climbed to 26%, up from 15% in 2017, with broader initial ownership credited for boosting early secondary-market activity.
The bank's analysis underscores how changes in investor composition and post-2022 yield dynamics have reshaped how new corporate debt is distributed and traded shortly after issuance.