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
The senior financials sector has had a good quarter – as it usually does, but at €43bn of issuance, we’re looking at around the €130bn level for the full-year. Again, that is way in excess of our earlier expectations, but activity has been very good in this opening period with €17.5bn issued in January, €15bn in February and a touch over €10bn in March.