(Bloomberg) -- At least six US companies are tapping the high-yield bond market Monday as the extra yield investors demand over Treasuries hovers at a two-year low.

AMC Networks Inc., MGM Resorts International and home builder The New Home Company plan to refinance their outstanding debt or conduct tender offers. Steel producer Algoma Steel Group Inc. is offering $350 million in second-lien notes to use for general corporate purposes. 

Two deals have investor calls Monday and are pricing the same day, in what’s known as a drive-by sale.  

Monday’s issuance blitz saw the most transactions launch since January 2023, with high-yield spreads sitting inside of 300 basis points, the lowest in roughly two years. Market sentiment was also buoyed by the Federal Reserve last week forecasting three rate cuts this year. 

“The nominal cost of borrowing has come down dramatically since the end of October, and the market is very receptive to new issuance,” said Bill Zox, portfolio manager at Brandywine Global Investment Management. “Borrowers are doing the right thing by taking advantage of that.”

Many companies coming to the market are seeking to refinance existing debt and extend maturities. Year-to-date, refinancing transactions are running at record levels as a percentage of new-issue proceeds, said Ken Monaghan, co-head of high yield at Amundi US.

Several borrowers are pursuing 5-year issuances that are not callable for two years, giving them some breathing room, especially if rate cuts don’t happen as quickly as expected, Zox said. The Secured Overnight Financing Rate also remains higher than the 5-year Treasury yield, making fixed-rate debt more attractive. 

Debt-management transactions like those seen on Monday are fairly standard within high-yield, but the market has been more than receptive to riskier, higher-quality deals recently. A group of debt arrangers sold $6.1 billion of leveraged loans and bonds on Friday to support Stone Point Capital and Clayton Dubilier & Rice’s acquisition of Truist Financial Corp.’s insurance business. 

--With assistance from Gowri Gurumurthy.

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