New Loan Production

YTD GBP Loans (greater than GBP 100m)

New Issuance - Market observation per 31 March 2021 -

GBP loan production recovers to pre pandemic levels

  • Q3 2020 was fairly quiet quarter in terms of loan production following the significant financing initiatives which took place in H1 2020 as a response to the pandemic.
  • Q4 2020 showed a recovery which carried on into Q1 2021, with YTD loan production closely in-line with pre COVID-19 levels.
  • Loan production in industries more significantly impacted by the pandemic remains as a trend from 2020, with significant activity in sectors such as retail, restaurants and entertainment, and transportation.
  • New loan volumes from the utilities sector, one of the industries with limited comparative impact from the pandemic, has continued in Q1 2021. Utilities issuers have also continued to access the fixed income market supported by stable credit rating positions.

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 sovereign bond 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.
  • Nevertheless, risk sentiment eased quickly thereafter once government yields started to decline following the Fed’s and ECB’s announcements that they will continue supporting the economy.