Active primary markets with high oversubscription and low new issue premiums
Another great start to the year, with a corporate offer that reached 35 billion euros in January. There was some supply indigestion at the beginning of the month that led to a widening of credit spreads, but this trend has receded in recent weeks. Demand for new issues was very high, with books oversubscribed, although this also resulted in fairly low new issue premiums. Similarly, the leveraged loan market is also active and seeing strong demand in the primary sector. As such, the roughly 30 basis point increase in the cost of debt since late November has not deterred any issuance in either the bond market or the loan market.
Major non-guaranteed senior offer in January without reaching last year’s level
Supply of senior unsecured instruments reached €35 billion last month, divided into €22 billion in senior preferred bonds and another €13 billion in senior bail-in prints. Altogether, this represents 26 billion euros less than what we saw last year in the same period. The most notable difference compared to January 2023 is in senior bail-in instruments, for which we see a decrease of €11 billion versus just €5 billion for senior preferreds.