Global bond issuance so far this year is running at its highest levels since the year before the global financial crisis, reports the Financial Times based on data from the financial markets platform Dealogic.
A total of US$4.88 trillion of debt has been sold since January, a figure close to the peak of 2007 when US$4.91 trillion of bonds were issued over the same period.
Issuers have been able to take advantage of low borrowing costs and investors’ appetite for yield, while sales have been stimulated by policymakers’ efforts to encourage economic activity, including bond-buying programmes undertaken by the European Central Bank (ECB) and the Bank of Japan (BoJ).
Several governments have even been able to issue bonds at negative yields this year and more recently, some corporates have successfully adopted the same policy. This development has been encouraged by the ECB expanding its bond-buying programme from government debt to corporate debt at the start of June, which has seen over €20bn of corporate bonds purchased over the first three months.
Earlier this month both German consumer products group Henkel and French pharmaceuticals group Sanofi were able to sell bonds with a yield of -0.05%. Henkel’s €500m bond matures in two years, while Sanofi’s €1bn bond comes due in January 2020.
According to the FT, a total of around US$12.6 trillion of debt now trades with a yield below zero. The paper also reports that debt sales to date this year are 9% ahead of the pace in 2006, when banks underwrote a record US$6.6 trillion of debt; the figures excluding sovereign bonds sold at auction, such as UK Gilts and US Treasuries, or municipal offerings.
The industry needs to digitise its core businesses, cuts costs and create increased shareholder value, concludes a report from Oliver Wyman.
An upgrade for the US, Europe and Japan is offset by downgrades for Mexico and other major emerging economies.
Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Société Générale and UniCredit signed a memorandum of understanding in Brussels for developing digital trade chain (DTC).
The Swedish corporate bank’s fixed income macro strategist believes rising infltaion will see the Riksbank lift rates.