August 4, 2016
By Nandeep Roopray
So far in 2016, a total of £74.2bn has been issued in Sterling denominated bonds. While this is down only slightly from the average issuance of £76.4bn over the last 3 YTD periods, the composition of issuance has changed significantly year-on-year:
- Corporate Sterling denominated bond issuance has halved year-on-year, with only £8.6bn issued via 32 deals in 2016 compared to £16.4bn via 64 deals in 2015 YTD. Volume is at the lowest YTD level since 2005 (£5.7bn via 36 deals), while the average spread to benchmark for Sterling corporate bonds has hit a 3 year high of 256.6bps (351.2bps in 2013 YTD)
- Sterling denominated bonds from FIG issuers have also dropped year-on-year. Down 41% from 2015 YTD (£13.4bn via 48 deals), volume of £7.9bn via 34 deals in 2016 is the lowest for a YTD period in over 20 years (£3.5bn via 30 deals in 1995 YTD)
- For the first YTD period since 2010, Sovereign, Agency, and Supranational (SSA) issuers account for over half of Sterling denominated bond volume, 51% in 2016 YTD compared to the last 5 YTD average of 44%. SSA issuance so far in 2016 totals £37.7bn (67 deals), the highest YTD volume since 2012 (£46.5bn via 91 deals)
- In the remainder of 2016, a total of £31.8bn in Sterling denominated bond volume is due to mature. This increases to £89.1bn in full year 2017, the highest annual total over the next 3 years (£69.9bn in 2018 and £67.3bn in 2019)