Sales in 2013 have climbed 17.5 percent from the corresponding period last year, Bloomberg data show. Offerings this week of $15.7 billion followed $14.4 billion in the period ended May 31, a week shortened by the Memorial Day public holiday in the U.S. Weekly sales have averaged $33.7 billion this year.

Offerings of junk-rated notes, graded below Baa3 by Moody's Investors Service and lower than BBB- at Standard & Poor's, accounted for $2.3 billion of the total, the second-slowest week this year, from $2.6 billion in the prior period, Bloomberg data
show.

“The new issue market is still very healthy, but it got overheated,” said Josh Witz, co-head of U.S. debt capital markets at Societe Generale SA in New York. Petrofac canceled its offering of five- and 10-year bonds on June 3, according to a person with knowledge of the transaction, who asked not to be identified without authorization to speak publicly.

Eoin Treacy's view Record low interest rates have been an incentive for corporations to lock in their cost of capital at the best levels they have seen in generations. This ultra-low interest rate environment created a situation where a considerable number of companies could raise cash in the corporate bond markets cheaper than they could in the equity markets. This encouraged share buybacks and impressive dividend growth, both of which have acted as tailwinds for the bull market in equities over the last few years. (Also see Comment of the Day on December 11th 2012)

The corollary is that if anything occurs to change the ability of companies to source cheap capital in the bond markets there is likely to be a knock-on effect on equities.

The BB Composite Index spread over US 10-year Treasuries is an accessible tool for monitoring this relationship. It hit a near-term low near 260 basis points on May 23rd and has rallied to test the more than twenty-month progression of lower rally highs. A sustained move above 300 basis points would represent an inconsistency and would suggest a change to the rhythm of the junk bond markets.