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 has made banks more wary of lending and conditions remain strained despite much political interference – with even negative central bank deposit rates failing to lift the lending gloom – by much. More of the same we think through 2017 although senior non-proffered deals might become all the rage as TLAC considerations become increasingly important.
MiFID II Countdown
ii) Senior Financials Monthly Supply
Senior financials eventually delivered a respectable €13.5bn of issuance in September 2017, with a steady stream of issuance through it. It wasn’t the best September we have had, but the monthly volume was the best since May.
The erratic supply dynamic leaves the total for the first nine months of issuance finally through to €115.1bn. And for the full-year? €140 – 150bn, perhaps.