Forward delivery bonds have already surpassed their annual record for issuance as issuers use the tool, along with taxable refundings, to replace the loss of tax-exempt advance refundings. Forward delivery bonds are attractive to both issuers looking for savings and investors seeking any incremental yield in an uber low-rate environment, Barclays PLC said in a Friday report. The underwriting process is similar to a typical refunding transaction, but with an extended settlement date. So far this year, $6.224 billion of forward delivery bonds have been issued, according to Bloomberg and Barclays data. That is up from about $2.724 billion in 2020 and $4.484 billion in 2019, the previous record. Prior to 2018, issuance was below $1 billion except for 2015 where it was just above that figure at $1.560 billion.
Source: The Bond Buyer
