Global bond issuance at $2.1 trillion in first four months of 2018

LAGOS (Capital Markets in Africa) – S&P Global Ratings indicated that the global issuance of corporate bonds, U.S. public finance bonds, other international public finance bonds and structured finance products totalled $2.07 trillion in the first four months of 2018, up by 1% from $2.05 trillion in the same period of 2017.

In comparison, it said that global bond issuance reached $5.4 trillion in 2015 and $6.1 trillion in 2016. It attributed the year-on-year increase in the first four months of the year to a significant annual growth in global structured finance issuance to a seven-year high of $370bn, as well as to a 27% year-on-year rise in Chinese corporate bond issuance.

Still, it forecast global bond issuance to decrease by 2.3% in 2018 from $6.26 trillion in 2017, due to a projected decline in U.S. public finance issuance as a result of the revised U.S. tax code, which would likely be offset, in part, by expectations of higher global structured finance issuance. It also anticipated that increasingly restrictive monetary policies would hamper global bond issuance this year. 

S&P  pointed  out  that  issuance  by  non-financial  institutions amounted to $748bn, or 36.1% of total debt issues, in the first four months of 2018. Issuance from financial institutions followed with $731.5bn (35.4%), then investor-placed structured finance issuance with $369.8bn (17.9%), international public finance issues with $125.7bn (6.1%), and U.S. public finance issuance with $94.3bn (4.6%). The agency indicated that the figures cover long-term debt with maturities that exceed one year and exclude debt issued by supranational institutions.