No less than $1.31tr of corporate bonds have been issued so far in 2009, surpassing the shrunken $1.08tr of syndicated lending. These figures make a stark contrast with 2007, when, in the heady days of the loan markets peak, volumes reached $4.16tr, or four and a half times issuance of corporate bonds.
The fresh data confirmed for many a shift between the two markets that has become increasingly apparent this year, as borrowers have struggled to fund themselves in a beleaguered bank market.
"It does show the tables have really turned," said one corporate bond banker this week. "The questions are, will it continue like this, and is this a permanent shift of affairs?"
Most bond syndicate bankers believe the change will persist, at least throughout 2010. While corporate bond issuance looks set to slow from now until the end of this year, as most issuers have already fulfilled their refinancing needs even into next year, borrowers are expected to rush back into the bond market in January.
"At this point, were really only going to see opportunistic deals from the household names and frequent issuers," said a syndicate banker. "But youll see borrowers with renewed refinancing needs by next year lining up to go to the bond market.
"There is also the fact that this market is opening up to a lot more names which in the past would have been typical loan clients, so it will be interesting to see how that dynamic develops."
Loans bankers, meanwhile, stressed that the bank lending market was slowly on the mend, with deals finding good demand and pricing finally dropping again partly as banks are trying to compete with the bond market.The data from Dealogic also showed that that the shift between the markets was evident in both the US and Europe, where bond volume is outpacing loans by 25% and 61%