Corporate borrowing drives global debt issuance to a record $6.8 trillion in 2017

Russell Boyce, ReutersLondon, City, Canary Wharf

  • Corporate borrowing made up 55% of global debt issuance in 2017.
  • A decade of low interest rates caused investors to look to emerging markets and company bonds for returns.

LONDON – Corporate borrowing helped push global debt issuance to a record $US6.8 trillion this year, according to data by Dealogic.

Borrowing by corporates – which accounted for more than 55% of the $US6.8 trillion – and governments reached a new high in 2017 via syndicated bond sales, generating huge fees for the banks underwriting the sales. The figure relates to mortgage- and asset- backed securities, but does not cover sovereign debt sold at auction.

“The debt issuance is pretty much off the charts everywhere,” AJ Murphey, head of capital markets at Bank of America Merrill Lynch told the Financial Times. “Latin America had a good year. Asia had a great year. And yet we see money coming from other regions into the US and European markets,” he said.

Persistently low interest rates in developed economies for almost a decade has driven investors to look to emerging market governments and company bonds for returns.

The new record for syndicated sales also meant investment banks generated fees of highs not seen since the 2008 financial crisis. Banks earned $US30 billion in bond fees this year, the highest level since records began in 2000, according to Thomson Reuters data.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.