Euro Credit Supply: Corporate supply still hefty

Corporate supply remains strong

Corporate supply amounted to €33bn in April, lower than the €50bn seen in March but still very much in line with previous years. Whilst uncertainty around the Middle East conflict persists and disruption is prolonged, credit markets have still retraced all the initial widening and are now sitting at rather tight levels once again.

The underlying swap rate moved up c.50-60bp, meaning the cost of debt has risen for issuers. Nonetheless, corporate supply is still running ahead of many previous years on a YTD basis, with €167bn issued thus far this year.

Corporate hybrids have been a notable contributor to the increased supply. April saw hybrid supply of €10bn, pushing the YTD total up to a considerable €32bn, compared to just €7bn by this time last year. Looking at sectors, TMT and Utilities have already seen €41bn and €30bn respectively issued this year, boasting a strong % increase on last year. This is driven by the large tech issuers coming to the EUR market, and CAPEX needs for utilities.

Reverse Yankee supply still ticking

There was a small slowdown in Corporate Reverse Yankee supply in April (€5bn) relative to the large supply in March (€24bn). On a YTD basis, Corporate Reverse Yankee supply has reached €45bn, running ahead of previous years, as US tech issuers bring significant size to the EUR market.

Bank senior unsecured issuances pick up in April

EUR-denominated bank bond supply reached just over €33bn last month. Nearly €16bn was issued in covered bonds, up €5bn compared to March levels. This brings covered bond supply to over €81bn in 2026 YTD.

We also saw senior unsecured issuances pick up in April to reach €15.5bn, up €10bn MoM on the back of the ceasefire between the US and Iran. This brings the segment's YTD supply to nearly €92bn, still behind last year’s level due to senior preferred issuances lagging by €18bn YoY.

After a quiet month of March amid spread volatility, the subordinated bond primary market also picked up in April with €1.75bn issued. This is split, with €1bn printed in Tier 2 bonds and another €0.75bn in AT1 instruments. This brings the Tier 2 supply to €8.5bn and the AT1 to €6.1bn on a YTD basis.

Despite the continued geopolitical uncertainty, we expect supply to continue on last month’s path in May as financials’ redemptions are set to increase slightly.