A deluge of debt sales in Europe has pushed issuance for the year beyond $130 billion in just a matter of days.
(Bloomberg) — A deluge of debt sales in Europe has pushed issuance for the year beyond $130 billion in just a matter of days.
More than 80 predominantly high-grade borrowers have piled in to the market in January to lock in funding that’s around the cheapest since the summer, according to data compiled by Bloomberg. It’s the fastest start to a year for Europe’s publicly-syndicated debt sales on record, Bloomberg data going back to 2014 show.
“Issuers are taking this opportunity to get some funding done given there are still a lot of uncertainties out there,” said Marco Baldini, global co-head of investment grade syndicate at Barclays Bank Plc. “Right now, investors have cash and are positively disposed towards primary market investing.”
Sovereigns Italy and Belgium and lenders BNP Paribas SA to Deutsche Bank AG are among 23 issuers set to price deals on Tuesday, as a drop in borrowing costs tempts them to raise funds and lifts marketwide sales so far this year to about 121 billion euros ($130 billion). The issuer tally isn’t far off the highest one-day record of 26 borrowers set in January 2020, Bloomberg data show.
“Bond issuers are rushing to print new deals before 2023 maybe turns to the worse like 2022 did,” said Lutz Roehmeyer, chief investment officer at Berlin-based Capitulum Asset Management.
Gauges of corporate credit risk have recently eased back to levels last seen in April, before global markets were buffeted by wild swings as central banks sought to get a grip on worsening inflation with multiple rate hikes. With the economic picture since steadying and the likes of Goldman Sachs no longer predicting a euro-zone recession, the wave of debt deals could run on — at least for now.
“Liquidity is still strong and there are good reasons to be optimistic,” amid falling energy prices and lower inflation data, said Atul Sodhi, Credit Agricole CIB’s global head of debt capital markets. Yet he cautions that “we are not completely out of the woods yet.”
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