Bond and share issuance jump on improved market conditions

Tim Wallace
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BANKS and finance firms increased their fundraising through bonds, shares and commercial paper in October, according to Bank of England data published yesterday, as improving financial market conditions allowed firms to tap up more investors.

Gross share issuance hit its highest level in more than a year at £1.3bn in the month, up from £0.2bn in September. Bond issuance rose from £14.5bn to £17.8bn, while commercial paper issuance increased from £14.1bn to £15.4bn.

By sector, monetary and financial institutions raised £13.6bn, up from £12.1bn in September, while other finance firms raised £12.7bn up from £7bn, though non-finance firms’ issuance slid from £9.3bn to £7.7bn.

Schemes like QE3 in the US, the European Central Bank’s plan to buy Spanish bonds and sustained low interest rates have all calmed investors and improved fundraising conditions.

However, net issuance fell £5.8bn as not every maturing debt instrument was rolled over, with banks’ net issuance dropping £9.9bn, but other institutions’ issuance turning positive at £1.2bn and non-finance firms coming in at £2.9bn.