This Tuesday, companies rushed out to finance themselves in the capital market. With the new year, maturities are looming again and companies have identified this moment as optimal to adjust the cost of financing as much as possible.
Specifically, at mid-session on Tuesday in the Old Continent there were already crowds of 28 emitters for placing its debt on the market for a total of 30.4 billion eurosaccording to data collected from Bloomberg. This figure, close to thirty, is the highest in a single day since data was available, just over a decade ago. Although it is already the fourth trading session of the year, companies have waited until today to ensure sufficient purchasing volume after these days of lower activity on the stock markets.
He tempo of these issues also respond to current spreads and the expectations that these may increase since, according to secondary market data, the profitability of credit in Europe and of less risky references (sovereign bonds) are close to their lowest levels of the last three years, around 100 basis points.
And at this time, the market demands a return slightly higher than 3.5% to European corporate debtaccording to the indices prepared by Barclays and Bloomberg. In turn, the 10-year German bond is listed on the secondary market at 2.45% profitabilityits highest level since July.
In recent weeks, the fear that the ECB will not be able to accelerate the interest rate cut too much has permeated investors, and even more so after the slight rise in inflation that was observed this Tuesday, after the December data, 2.4% year-on-year that analysts expected.
“It is true that this year’s calendar favors this week being the one chosen by many companies to begin their annual emissions,” they explain at Barclays. “But, fortunately, investors have liquidity and are flocking to issues,” they add. Some of the names that have come to the market are Barclays itself, Commerzbank or Nestlé, which has issued 1,000 million at 7 and 20 years. Renault, for its part, has issued a 3-year bond while Enel has issued it through a hybrid bond. We must also remember that from the end of the month they will not be able to broadcast due to the period of blackout.
Looking ahead to the end of this year that has just begun, the market is now only pricing in four rate cuts of 25 points compared to the 6 or 7 that were anticipated just a few weeks ago. This explains the fall in debt prices these days.
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