Euros run hot as corporate issuers lock in tight funding

Higher volumes and tighter spreads defined Europe’s high grade corporate bond market in 2025, while issuers have enjoyed lower new issue premiums as investors remained flush with cash to put to work.

Companies tore through the high grade euro bond market in 2025. A 10% rise in syndicated benchmark volumes year on year did nothing to widen spreads or the concessions paid by borrowers, according to GlobalCapital’s Primary Market Monitor.

IG corporate borrowers printed a total of €370.8bn of benchmark sized trades up to November 21, up from the €338.2bn sold in all of 2024.

After the US tariff announcements in April, many issuers brought funding forward, making May the busiest month of the year with almost €60bn of benchmark issuance. That was followed by an unusually busy November, with a total volume of €59.2bn, more than double the amount recorded in the same month in 2024.

Despite the heavier supply, borrowers paid only a fraction of the average new issue premium they had to stump up in the previous 12 months. The average new issue concession in euros has been 1.4bp in the year to November, PMM data shows, down from 5bp in 2024. Issuers paid the most in April after the US announced sweeping global tariffs, with an average concession of 7bp.

The average maturity in euros has shortened this year, to about 8.8 years from 9.2 years in 2024. This likely reflects higher volatility after the US tariff shock, the persistent wars in Ukraine and the Middle East, France’s sovereign rating downgrade and a more subdued global growth outlook.

US borrowers have crossed the Atlantic all year to tap euros for cheaper funding than they can achieve in dollars. They raised €84.1bn in euros across 106 tranches in 2025 up to November 21, up from €58.4bn in 2024.

That accounted for more than a quarter of euro benchmark sized corporate deals this year.

Alphabet contributed a large share of this flow with a total of €13.25bn. The issuer made a scorching debut in April with a €6.75bn five-part deal and returned in November with a jumbo €6.5bn multi-tranche trade.

Bankers see this as the start of a broader move by US hyperscalers searching for funding for artificial intelligence infrastructure projects, which they expect could bring a hot flow of issuance into the euro market next year.

It was not all rosy however, with the sterling market having a rocky year. The 30-year Gilt yield climbed 51bp over the past 12 months and was around 5.44% on November 20, after rising to 5.725% at the beginning of September, its highest level since 1998.

Total sterling volume from corporate borrowers was down almost 10% year to date, from £24.7bn in 2024 to £22.6bn in benchmark size this year.

However, as in the euro market, borrowers paid much less in new issue concession, at 1.5bp this year on average compared with 9.3bp a year ago.

As new issues became scarce, most trades that came to market went on to perform strongly in the secondary market. Demand was buoyant too, with the average subscription ratio rising from 2.8 times deal size in 2024 to 3.6 times in 2025.

The popularity of euros and the lack of deals in sterling reflect, in part, higher interest rates in sterling and that market’s smaller domestic investor base.