European states avoid the bond market as debt issues tumble

Marion Dakers
EUROPE’S market for new debt issuance has shrunk 17 per cent since last year, new figures show.

As uncertainty over the introduction of eurobonds continues to cloud the market, statistics from Dealogic show that Europe’s level of new debt issuance fell to $1.11 trillion (£723bn) in the first five months of 2012.

This is down from $1.34 trillion a year ago and just above 2010’s level.

Governments and financial institutions have both raised less through bond and other debt deals this year. Euro-denominated issues dropped 22 per cent to $635.5bn – the lowest level since 2004, and the lowest percentage of European debt issued in euros since the single currency began.

However, corporate debt issuance in Europe has risen 12 per cent since last year to $237bn, the research showed, as more firms spurn bank loans in favour of bond issues or syndicated loans.

Brewer SAB Miller tops the corporate debt tables in the year to date, with its $7bn issue to help repay loans after buying Foster’s.

The deal helped Barclays to take top spot in the debt bookrunners’ league table for the year to date, raising its share of the shrunken market to 7.3 per cent.