Euro Credit Supply: Supply continues at a strong pace

Corporate supply was very substantial in May

• Corporate supply has been very active with €9bn last week and a substantial €22bn the week prior. Supply in May totalled €68bn for corporates, an increase on the average normally seen in May. As such, the YTD figure now amounts to €235bn, running notably ahead of most previous years with the exception of 2020 when we saw the Covid-induced rush to the market. 
• Looking ahead, the backdrop remains supportive for robust issuance. Reverse Yankee supply and substantial deals from US tech issuers are set to keep volumes elevated. As a result, we now forecast €485bn for 2026 – a 7-10% increase versus last year and a new record high for EUR corporate supply. That said, it’s important to note that redemptions are also rising, reaching approximately €304bn. This means net supply will remain broadly stable at around €180bn, in line with 2025 levels. The biggest drivers for higher supply thus far this year have been: (1) Reverse Yankee supply; (2)  Technology supply; and (3) Corporate Hybrid supply.
• Corporate hybrids have also been very active this year so far in primary markets with no less than €32bn issued on a YTD basis. We forecast at least €50bn for the year as refinancing of first call dates is substantial, as well as rising capex and M&A, and new entrants are likely to be driven by rating defence.

Banks’ senior preferred issuance tripled in May

• EUR denominated covered bond issuance reached nearly €18.5bn in May. That’s the highest level seen since February and brings the 2026 YTD total just over the €100bn mark, a comfortable €15bn ahead of the 2025 YTD gross level.
• Banks issued nearly €27.5bn in senior unsecured bonds last month, which is €12bn ahead of what we noted in April. The primary market activity over May brings the senior unsecured segment’s YTD supply to nearly €120bn, only €4bn behind the 2025 YTD level despite the geopolitical instability and related volatility observed earlier this year.
• We record €13bn printed in senior preferred instruments, which is three times what we saw in April and almost reaches the January issuance level. The senior preferred bond supply therefore lies at €39bn in 2026 YTD. Another €14.5bn was supplied in senior bail-in bonds over May, bringing the YTD supply to €80bn. We also note a recovery in activity of subordinated instruments issuance with €9.5bn printed last month, the highest level seen since the start of the year.