Europe breaks government bond issuance record

European markets began a crisis earlier this year for the new government, denying fears that raising funds to raise funds for the economic recovery would be more costly.

The first marginal cost of bond syndication deals managed by banks was the equivalent of $ 150 billion raised by governments across Europe and the UK, the largest amount of the year back in 2000 on refinancing records.

Bonds to major eurozone government orrow recipients, including auctions, totaled 3.3 billion, up 20 percent from last year, according to figures compiled by ING.

Demand proved stable despite the flood of supply and volatile price measures for bond trading in the open market. The interest of investors in the primary market for new debt, supported by the European Central Bank’s procurement program, has allayed concerns that governments will have to pay more than enough to cover their debt.

“We probably had the warmest initial market in January and early February,” said Jamie Sterling, head of debt capital markets at BNP Paribahan’s sovereign state, superpowers and agencies. “The volume has been incredible.”

The start of the year was the busiest financing season for the government, with state treasuries accelerating this year to take advantage of favorable conditions before increasing the cost of adoption.

At the height of the Covid-19 crisis, governments raised more debt through bond syndication than three months apart last spring. Eurozone debt to GDP in March 2020 rose to 97 percent at the end of September, according to the latest official reading. 97 to 97 percent

“Last year was the biggest year in the sector. Stirling said there was some concern this year as to whether the market would re-digest the same level of re-issuance at such stringent prices.

Appetite for new debt removes any worries about pricing. The average yield for UNzone bond syndicates has fallen to 0.755 per cent since January, down from 0.94 per cent in the first three months of 2020, according to BNP Paribahan. The low yields on newly issued bonds show that the government can raise funds at a lower price even after the debt ramp.

The ECB’s massive bond purchases in the open market and the interest shown by the asset managers involved in cash have helped to increase the demand for new bond offers. Book order for bond syndication Topold Records, Lets public debt agencies push for better rates. Long-term issuance was particularly busy as issuers tried to lock in attractive prices.

The sharp rise in global bond markets since mid-February amid fears of U.S. inflation has threatened the encouraging environment for new bonds, as investors face the possibility that the value of newly bought bonds will fall.

“I expected there to be more difficulties,” said Antoine Bouvet, a senior rate strategist at ING. If investors are concerned about falling prices, they may demand higher premiums on new bonds to compensate issuers. Buwett said investors’ confidence that low borrowing prices were partially reflected in European bond prices would not slip too much.

According to Ionis Rallis, who has continued with such issues in JPMorgan, the rise in bond yields in the United States has led to “some reconsideration.”

The line chart of Bloomberg Barclays Pan-European Treasury Indicators (Total Returns) has shown pressure on European government bond prices this year.

Investors who have been burdened with long-term debt face a sharp fall in prices, as this long-term debt carries further inflationary risks. The rescheduling of the bond market came faster than many analysts expected.

“Some investors were probably a bit offside at one point,” Relis said. Issuer and investor demand has recently been on medium and short-term bonds. “The demand for a long end will come back but we need to see some stability,” he added.

European markets for green government onds have risen sharply in the quarter. Italy has raised the all-time high of পের 8.5 billion in Europe Green Bond debuts. France and the UK and Spain also tapped the market as they moved towards their first green offering.

The market expects the market to grow significantly in the second half of the year as the EU begins issuing 22 225 billion in green bonds as part of its 7 50,750 billion coronavirus recovery fund.

Rallies said green bonds are both very popular politically at the moment, but there is also strong demand from investors.

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