Euro Credit Supply: Record-breaking corporate supply

Record-breaking corporate supply for February at €42bn

Corporate supply remained very busy, unusual for February due to earnings season. The record-breaking supply of €42bn was even up on January’s €36bn. As such YTD supply now sits in excess of all previous years at €78bn. We expect supply will remain busy throughout the coming months as market conditions remain favourable and more uncertainty lies ahead later this year, thus front loading is being seen. In addition, demand remains very strong for these new issues as books are very strong sitting above average, despite the very low NIPs. We did, however, see demand falter slightly last week as investors began to indicate a need for more NIP at these relatively tight spread levels.

Drop in the February financial supply after a record-breaking month of January

In February, senior unsecured bond issuances were halved compared to January levels. Indeed, supply reached €18bn, €17bn behind what was seen the previous month. Issuances were split with €14bn in bail-in senior and €4bn in preferred senior. Therefore, the overall drop is due to a significant decline in new issues in the preferred segment.