European corporate bond issuance set for record year
Sales of corporate bonds is on course for a record year, as stimulus from the European Central Bank and extremely cheap borrowing costs propel companies into capital markets. Companies are tapping debt markets more aggressively despite ECB scaling back stimulus. According to Mary Pieterse-Bloem, global head of fixed income strategy & portfolio management at ABN AMRO Private Banking and an assistant professor of Finance at Erasmus School of Economics, this year will again be a record year for European corporate bonds.
‘We feel very comfortable for the upcoming year with the solid share of corporate bonds in our portfolio. The ECB continues to stimulate the rates and companies are holding a lot of cash. If they are not going to pay their shareholders generously, it would mean that the supply of bonds would decrease which supports the rates.’