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
A late flurry of deals from the likes of HSBC, Commerzbank and ABN AMRO took the senior bank supply total to a very good €14.6bn for the month, exceeding last year’s €12.6bn. For the 11-month period, we’re just shy of €130bn and need another €6bn to get away in December in order for 2018 not to be the lowest for senior supply since the euro currency was introduced (that was €135.75bn in 2017).