Bond markets off to sluggish start to the year

Michael Bow
Follow Michael
UK DEBT markets have got off to their worst start to the year since 2008, hinting at a slowdown in appetite for debt deals from investors, figures showed yesterday.

Debt market volumes fell to $27.2bn (£17.4bn) for the period

1 January up until yesterday, down from $67.4bn in the same period last year, according to the figures from Dealogic.

The figures are the lowest deal volumes since 2008’s sluggish January statistics of $9.3bn, when investors were still licking their wounds from the 2007 financial meltdown.

Overall there have been 65 debt capital market deals since the start of the year, compared to 187 last year and the high water mark of 249 deals in 2011.

Corporate debt volumes also plunged 42 per cent versus a year ago. Despite this fall, they still accounted for a record high majority of debt deals.

The debt market downturn comes despite Virgin Media’s pricing of a $2.7bn corporate bond to tie in with its acquisition by Liberty Global, announced last week.

The Virgin deal was the biggest corporate telecoms bond since Intelsat sold a $5bn in June 2008 and the biggest corporate acquisition related bond since January 2012.

Debt investments have been climbing upwards since the financial crisis with year on year increases since 2009.

Analysts have pointed to a “great rotation” out of debt markets into equity since the start of year as evidence of a debt slowdown. It follows record high inflows into stocks and shares, hitting investor appetite for fixed income.