It used to be that companies issued bonds and asset managers bought them. The situation has changed, making companies the new top dog in the market. Because of their huge un-patriated cash piles, companies are buying up each other’s debt in huge volumes. American multi-nationals now own over $400 bn of US corporate bonds, amounting to near 5% of the total market. The buying is part of a move away from the money market accounts corporates used to rely on. In total, US corporates have over $2 tn in cash and securities.
FINSUM : This is an interesting level of interconnectedness that few talk about. It makes one wonders about vulnerabilities in the event of a crisis.