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Europe's Bond Sales Set New Record

Sovereigns Italy and Belgium and lenders BNP Paribas SA and Deutsche Bank AG are among 23 issuers set to price deals on Tuesday

January 10, 2023
5 minutes
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A surge in debt sales in Europe has pushed issuance for the year above $130 billion in just a few days.
More than 80 high-grade borrowers have entered the market in January to secure funding at some of the lowest rates since the summer, according to Bloomberg data. This is the fastest start to a year for Europe’s publicly-syndicated debt sales on record, according to Bloomberg data going back to 2014.

"With so many uncertainties still looming, issuers are taking this opportunity to raise some much-needed funds," said Marco Baldini, global co-head of investment grade syndicate at Barclays Bank Plc. "Right now, investors have cash on hand and are generally receptive to primary market investing."

Sovereigns Italy and Belgium and lenders BNP Paribas SA and Deutsche Bank AG are among 23 issuers set to price deals on Tuesday. A drop in borrowing costs has tempted them to raise funds, and marketwide sales so far this year have reached 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, according to Bloomberg data.

"Bond issuers are rushing to print new deals before 2023 in case things take a turn for the worse, like they did in 2022," said Lutz Roehmeyer, chief investment officer at Berlin-based Capitulum Asset Management.

Corporate credit risk gauges have recently eased back to levels last seen in April, before global markets were buffeted by wild swings. Central banks sought to get a grip on worsening inflation with multiple rate hikes, but the economic picture has since steadied. Goldman Sachs no longer predicts a euro-zone recession, so the wave of debt deals could run on — at least for now.
Atul Sodhi, Credit Agricole CIB's global head of debt capital markets, said that while liquidity is still strong and there are good reasons to be optimistic, caution is still warranted as "we are not completely out of the woods yet." This is due to falling energy prices and lower inflation data.

Adan Harris
Managing Editor
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
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Cathy Hills
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