Euro Credit Market: Unprecedented November Boom
The European credit market witnessed an extraordinary surge in November, primarily driven by US tech companies seeking substantial funding.
Executive Summary
Corporate Credit Supply Soars:
November's corporate credit supply reached an astonishing €69bn, shattering previous records since 2020 and far surpassing the typical November range of €30-40bn. This has pushed the year-to-date (YTD) supply to an impressive €450bn, exceeding initial forecasts and setting a new annual record.
Tech Issuers Lead the Charge:
A significant contributor to this surge was the arrival of tech issuers with substantial financing needs. The Technology, Media, and Telecommunications (TMT) sector's issuance neared €100bn in 2025, with Telecoms accounting for €44bn and Tech issuers dominating the rest. This trend is expected to continue, with supply projected to grow by 10% in the coming year, fueled by AI and cloud infrastructure investments.
US Tech Companies Tap Euro Market:
Notably, a substantial portion of this tech-driven supply originated from US issuers. Corporate Reverse Yankee supply, where US companies issue EUR-denominated bonds, reached €26bn in November, as these issuers capitalized on the cost-saving benefits of the EUR bond market. This trend has pushed the YTD Reverse Yankee supply to €90bn for 2025.
Financial Supply Remains Robust
Senior Unsecured Instruments:
The issuance of EUR-denominated senior unsecured instruments witnessed a notable increase in November, reaching €22bn, a €6bn jump from October. This included over €5bn in senior preferred bonds and nearly €17bn in senior bail-in issuances, the highest level seen since May.
Full-Year Expectations Met:
November's activity brought the senior preferred segment to our full-year supply expectation of €72bn. We anticipate additional activity in the remaining weeks of the year. The senior bail-in segment also performed strongly, reaching just over €146bn, leading us to revise our full-year forecast upwards to €147bn.
Covered Bonds:
EUR-denominated covered bond supply remained robust in November, with €8.5bn printed. This brings the full-year total to €160bn, aligning with our initial projections.
Implications and Outlook
The record-breaking credit supply in November highlights the growing appetite for European credit, especially from US tech companies. This trend is likely to continue as tech issuers seek funding for AI and cloud projects. But here's where it gets controversial—is the market prepared for such a surge in supply, and what might be the implications for pricing and investor sentiment?
Disclaimer:
This analysis is presented by ING for informational purposes only. It does not constitute investment advice and should not be construed as a recommendation to buy or sell any financial instrument. Always conduct your own research and consult professionals for personalized advice.
