Thursday 21 May 2020 10:48 am

UK companies tapped capital markets for £30bn at height of coronavirus crisis

UK companies raised around £30bn in the corporate bond and equity markets at the height of the coronavirus crisis, a report released today showed.

From the middle of March to early April, 150 UK companies raised around £30bn on the capital markets in response to the coronavirus crisis, the report said.

Read more: National Express set for equity raise to strengthen balance sheet

More than 90 per cent of large UK companies use the capital markets to raise money, the research from think tank New Financial and bank BNP Paribas found.

That translates into around 1,000 large UK companies using the capital markets and a further 14,000 smaller companies.

UK companies raised around £750bn in the bond, equity and leveraged loan markets from 2014 to 2018, or around £150bn a year.

Nearly half of all large UK companies are listed on the stock market and around 45 per cent of listed companies used the stock market to raise money in the five-year period analysed

John Glen MP, economic secretary to the Treasury, said: “As City minister, I know that the health of our capital markets and the real economy are intimately linked, although few people fully realise the impact that our capital markets have on their everyday lives.

“As the report demonstrates, capital markets provide long-term funding for businesses across all regions of the UK, allowing them to invest and grow. This is particularly important now as we deal with and recover from the impacts of the Covid-19 pandemic.”

Read more: Catering giant Compass Group to raise £2bn to shore up finances during coronavirus crisis

William Wright, the founder and managing director of New Financial, said: “This report provides the most comprehensive picture yet of the value of capital markets to the UK economy and how relevant they are to UK companies. It underlines that while bank lending plays an important role in supporting the economy, capital markets add much-needed diversity, speed, capacity and flexibility to funding for companies.”

Anne Marie Verstraeten, UK country head at BNP Paribas, said: “Having an effective, purpose driven financial services industry is core to the functioning of the UK real economy. This report underscores just how vital access to capital markets is when it comes to supporting our UK companies, providing them with access to liquidity, investors, and to markets across the world.”

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