September 3, 2013 5:12 pm

Peripheral eurozone bond sales up sharply

A sharp increase in bond issuance from peripheral eurozone countries has helped to maintain trading volumes in Europe’s capital markets, underscoring improving investor sentiment towards its weakest economies.

All five peripheral countries – Portugal, Italy, Ireland, Greece and Spain – have increased the volume of debt they have issued this year by more than 60 per cent, compared with the same period last year, according to figures from Dealogic.

Greece has recorded the largest increase, with 12 bonds completed for £4.1bn this year, compared with just a single bond for $88m in the same period last year.

Total debt volume – mainly corporate bonds, but including syndicated sovereign debt – issued in the eurozone this year stands at $1.03tn, slightly up on the $1.01tn raised over the same period last year.

However, the 2,300 bonds priced represent the lowest activity level over the first eight months of a year since 2000, when 2,282 bonds were issued.

Despite the marginal increase in total eurozone debt, the volume of debt issued by the remaining core eurozone countries
volume stands at $803.1bn this year via 1,957 deals – the lowest volume since the comparable period in 2007, which recorded $778.6bn, and the lowest activity level since 2000, which saw 1,857 deals over the same period.

This drop in core eurozone volume has been offset by the year-on-year increase in debt volume from peripheral eurozone issuers. Volume from these countries is up 84 per cent so far this year to $222.6bn via 343 deals, compared with $121.3bn raised during the same period last year.

The average length of maturity for peripheral eurozone debt has increased considerably to 7.2 years this year from an average of 5.5 years at this point last year.

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