Data provided by Dealogic
The bar graphs below illustrate the trend in the growth and trends in issuance in the euro-denominated corporate bond market.
i) Senior Financials Issuance Since 2003
The all singing, all dancing days of senior issuance pre-financial crisis – are over. Admittedly, back then a fair portion of the supply was front-end in terms of maturity and league table motivated, but we have seen a material decline in senior issuance levels. The banking sector, quite simply, doesn’t need the money.
The difficult macro outlook had made banks more wary of lending but conditions and the outlook are less strained now. Nevertheless, we think we will only see issuance at around the average level established over the past few years, while senior non-proffered deals – as TLAC considerations become firmly entrenched – will be main senior funding structure now on.
MiFID II is HERE
ii) Senior Financials Monthly Supply
Senior financial issuance is running at a similar rate to that of 2017, with the opening quarter of the year delivering some €63bn of issuance. We do expect that to slow a little from here, as it usually does into Q2, while a more material decline is usually not seen until the final two quarters of the year. In previous years (post crisis), that run rate has slowed and showed signs of that same dynamic in April.