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 AAOIFI, which sets standards for the Islamic finance industry, has adopted Shariah-compliant rules for trading the metal.
Investors had anticipated that the Italan premier´s proposed constitutional reforms would be rejected, although the margin of defeat was heavier than expected.
Research from two UK business schools suggest debt-funded share buybacks boost the share price in the short-term and also the company’s performance longer-term.
GE and the Iraqi government will partner with Standard Chartered and the Trade Bank of Iraq to accelerate power and infrastructure projects.