ECB helps corporate bond sales hit €213bn in Q2

The European Central Bank’s Pandemic Emergency Purchase Programme helped companies raise €213 billion via bond sales in the second quarter of 2020, up from €210 billion in the same period of 2019, according to PwC’s “Debt Watch Europe” update.

While investment grade company debt sales were “prolific” at €201 billion, sales of high yield or “junk” corporate bonds in Q2 saw the lowest number of deals and issuance volumes for a number of years with 15 deals amounting to €12 billion — compared to Q2 2019, which saw 77 deals amounting to €34 billion.

PwC said: “Activity in the investment grade European bond markets during Q2 2020 was prolific.

“Q2 2020 saw 217 deals with €201bn of issuance volume, with volume far exceeding any recent previous quarter.

“In June 2020, the European Central Bank (ECB) took further emergency action by bolstering its Pandemic Emergency Purchase Programme (PEPP) by €600bn taking the total to €1.35trn.

“The ECB interventions and other central bank stimulus packages have greatly assisted the investment grade bond markets with many issuers accepting higher financing costs.

“Contrary to investment grade, the impact of the COVID-19 pandemic on the high yield primary market in Europe during Q2 2020 has been significant and longer lasting.

“Q2 2020 saw the lowest number of deals (in high yield) and issuance volumes for a number of years with 15 deals amounting to €12bn, and only one deal occurring in April 2020.

“This was a steep decline compared to Q2 2019, which saw 77 deals amounting to €34bn.”

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