Companies raced to bond markets last month, undeterred by the Ukraine war as they tried to lock in relatively cheap borrowing, though the March rush did not prevent first-quarter sales in the euro market from slumping to a four-year low.
Bond markets globally endured immense volatility in the January-March quarter, stoked by hawkish turns from the 0 Federal Reserve and European Central Bank, as well as Russia’s Feb. 23 invasion of Ukraine. That, coupled with lower funding needs, pushed bond issuance lower across all debt categories, with Refinitiv data showing it as the slowest first quarter in three years.
In the euro area, where debt markets froze for longer following the invasion, fundraising by investment-grade companies amounted to 93.6 billion euros, the worst first quarter since 2018, according to Refinitiv.
But March turned out to be the busiest month since September 2020 for euro investment-grade sales with some 43.5 billion euros raised.
The US market enjoyed its highest monthly volume on record at any time except during the pandemic liquidity crunch in early 2020, with $130.6 billion of sales in March. First-quarter sales however dropped to a three-year low.
“None of the syndicates expected it to go quite as well, said Helene Jolly, head of EMEA investment-grade corporate syndicate at Deutsche Bank, citing volatility, some bond outflows and inflationary pressures. – Reuters
