Following the holiday season, a record-breaking number of borrowers flocked to the European bond market, capitalizing on favorable market conditions. Driven by near three-year low spreads, issuers sought to raise capital in the first full week of trading in 2025.
According to Bloomberg data, 28 issuers aimed to raise at least €30.4 billion ($31.7 billion), a figure expected to increase throughout the day. This unprecedented volume marks the highest number of borrowers in a single day in the past decade, highlighting the robust demand for European debt. The surge in activity comes after a record year of new issuance in 2024 and reflects investor confidence in the European market. Spreads, the premium investors demand over benchmark rates, are currently near their tightest levels since early 2022, making borrowing conditions particularly attractive.
“This year’s calendar has compressed issuance into this holiday-shortened week,” noted Marco Baldini, Global Head of Investment-Grade Syndicate at Barclays Plc. “However, investors are well-positioned with ample liquidity and have readily accommodated these new issues.”
Prominent financial institutions such as Barclays Plc, BPCE SA, Natwest Markets Plc, Nationwide, and Commerzbank AG were among the participants in the bond sales. Nestle SA sought approximately €1 billion through a seven-year offering and a less common 20-year issue. Renault SA’s financing arm pursued a three-year deal, while Enel SpA presented a two-part hybrid bond offering.
This early-year market activity allows companies to secure funding ahead of earnings blackout periods commencing later in the month. Simultaneously, Hungary, Slovenia, and Belgium initiated government bond sales, with Chile seeking a euro-denominated social bond.
The pipeline continues to build, with German airline Deutsche Lufthansa AG and chemicals manufacturer Evonik Industries AG already mandating offerings in the near future. This sustained activity indicates a strong start to the year for the European bond market, suggesting continued momentum in the coming months.
European Central Bank Building in Frankfurt, Germany
In conclusion, the European bond market witnessed an unprecedented surge in borrowing activity in the first week of 2025. Driven by favorable spreads and strong investor demand, a record number of issuers seized the opportunity to raise capital. This early-year momentum signals a potentially active year for the European debt market.
