The big increase in supply last month came as rates fell and cheaper financing became available. Part of this has also been pre-funded starting next year, which will relieve some pressure on 2024. Despite the growth in supply, net supply remains moderate at €60 billion, due to the redemption volume of €246 billion euros to date.
The industrial and chemical sector leads the business sector in terms of supply, accounting for €56 billion in supply to date. Meanwhile, the consumer and automotive sectors are also seeing an increase in supply, standing at €49 billion and €50 billion year-to-date respectively. This is an increase of 24 billion euros for both sectors compared to the same period last year. However, the real estate sector continues to lag behind, not only in supply, which amounts to 7 billion euros, but also compared to last year, having decreased considerably compared to last year’s 24 billion euros.
Reverse Yankee’s corporate supply to date now stands at €40 billion. Due to the outperformance of the USD versus EUR corporate spread, the equation for many companies does not show any cost savings advantage. However, in November there was a notable increase in Corporate Reverse Yankee’s offer, of around €7 billion.
Supply from financial institutions reached €28 billion in November, bringing 2023 year-to-date supply to €312 billion, some €24 billion ahead of 2022 year-to-date total. Net supply increased to 13,000 million euros in November.
The supply of bank bonds reached 24 billion euros in November, almost doubling the total issued in October. The issue was divided into €22 billion in senior bonds (perfectly divided with €11 billion in senior preferred bonds and €11 billion in senior bail-in bonds) and €2 billion in subordinated debt.
The supply of covered bonds increased to 11.5 billion euros last month, far behind the 17 billion euros issued in November 2022. The issuance was led by Germany with 3 billion euros in print. Total euro covered bond issuance reached €188 billion, which is still €20 billion behind year-to-date supply in 2022. We expect covered bond supply to decline in 2024 with total issuance of 180 billion euros.