New Issuance

New Issuance Benelux Market

New Issuance - Market observation per 8 March 2021 -

2021 marks a great start in Europe’s primary bond market

  • In Q4 ’20, new issuance fully recovered. Sufficient liquidity and the vaccine programmes support the acceleration of deal flow in Q1 ’21
  • January & February ’21 hold a record issuance of over EUR 400bn of bonds in Europe, the fastest pace of issuance in years
  • Primary issuance is driven by a push for sustainable investments
  • ESG bonds (green, social and sustainable debt) hold 15% of March YTD new issuance compared to 7% in the same period in 2020

Changing risk sentiments slows down issuance in March ‘21

  • In the first week of March, risk sentiment gauges increase globally on the back of rising European and US treasury yields
  • Corporate borrowing costs and proxies for credit risk rise as the Fed declines to announce what tools are used to narrow down the spike in government rates
  • Consequently, 5 March ’21 marks the first day of the year with no sales in Europe’s primary market
  • Nevertheless, risk sentiment eases quickly thereafter once government yields started to decline following the Fed’s and ECB’s announcements that they will continue supporting the economy
  • European new issuance remains robust, and markets anticipate on a busy European IG bond pipeline

Financing conditions remain favourable

  • Despite rising risk sentiment, financing conditions remain favourable
  • Over 65% of tranches priced in March are quoted tighter than price guidance at launch
  • Issuers want to take advantage of the supportive environment and available liquidity