Debt markets falter in second half of 2011

DEBT issuance by companies dropped dramatically in the second half of 2011 as the worsening economic climate and Eurozone crisis weighed on the debt market, new data from Dealogic yesterday showed.

Companies issued $5.76 trillion (£3.71 trillion) of bonds in 2011, down six per cent from 2010’s level, with 60 per cent issued in the first half and just $2.31 trillion issued in the rest of the year – the lowest since 2008.

In Europe, debt issuance fell two per cent to $2.14 trillion in 2011 but the final quarter of the year saw companies raise just $289.2bn, the lowest total seen since the end of 2002.

Bonds issued in Swiss francs jumped by 54 per cent in the second half compared to the first and reached $927m over the year.

Euro-denominated corporate debt dropped by 15 per cent compared to 2011 to just $190bn, with more bonds issued in Chinese renminbi than euro in both the third and fourth quarters of the year.

US issuers were responsible for seven of the top ten bond issues of 2011, with Verizon’s $6.25bn issue in March and GE’s $6bn issue in January among the largest. The biggest was the $7bn debt issued by France’s Sanofi-Aventis in March.