Debt issuers are taking their feet off the accelerator. After four particularly intense weeks, it was capital market Now prepare to put the brakes on. The first month of the year is highly marked activity volumewhere countries and companies go out looking for investors to cover up to 40% of their investments financing needs annual.
The cost of financing increased dramatically and at an unprecedented speed during 2022, in line with the rise in interest rates in the UAE. European Central Bank (European Central Bank). The prospect of central banks continuing benchmark rates entering the market triggered the “call effect,” a trend that began to gain steam at the end of last year, with Changing the tone among investors to heat up Moderation in the growth of inflation rates.
a) yes, After January is more active than usual And the traditional shutdown that occurs due to the earnings season (companies must respect the “hold-up” period), from Société Générale they warn that once the emissions quarantine ends, investors’ appetites will succumb. The evolution of the global economic contextWhich was marked by the war in Ukraine, the energy crisis and inflation.
Fernando García, Director of Capital Markets of the aforementioned company, confirms that, despite the expectation of a volume higher than that recorded in 2022, above all, in the field of corporate debtthe movements “will not be high”, since the companies have a “sufficient” level of liquidity to avoid fluctuations in the coupon rate.
to date, Banking took center stage, at least in the eurozone, where financing programs have mobilized a total of 100,000m so far this year, more than 13% of which has been registered in Spain. On a national level, excess demand has led entities such as The emergence of CaixaBank abroad With its first program in dollars, at a value of 1,250 million, in addition to another 500 million pounds. It thus joins Banco Santander, which adds 500 million in British currency and 3,500 million in “green notes”.
The need to refinance their long-term operations (TLTRO) and pull out on the European Central Bank (ECB) debt-buying scene forced banks to pick up the pace, after deposits skyrocketed. 37% in the last twelve months compared to 2021up to 26,800 million, making it the only tranche of the three analyzed (public debt, financial, and corporate debt) that witnessed an increase during 2022.
The public sector has also become more attractive to investors due to the recovery Profitability levels not seen in eight years. With the demand for recent auctions, in the case of the public treasury, it is evidence of the “strong” interest it is arousing among investors, at least in the short term and In such a volatile environment as the current one. It did so after reducing its volume by 17% last year to 34,125 million through twelve joint operations, seven of which bear the ESG seal.
In this sense, Garcia highlighted the decline in debt cases listed as ‘green’ in 2022, with a setback of between 18% and 20%, at least width. Despite this, he maintains, sustainable bonds continue the path of standardization “and will be normal in a not too distant time.”
However, the biggest loser from the increase in financing costs was corporate debt market. Firms chose to withdraw the accumulated liquidity “cushion” and cut out the go-to-market option. Specifically, the The volume of this type of bond showed a decrease of 63% And it’s still less than 8,000 million. Of this amount, the largest part (5,000 million) was captured during the first part of 2022, when Christine Lagarde It has not yet pulled the trigger on restrictive monetary policy.
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