European Banks on Hunt for Cash Flow
Posted on January 19, 2010 by Shay Greenberg for Luckyroom.com
European banks are leading in January in terms of new bonds issuing, with particularly strong presence in the U.S. financial market, bringing the highest proportion in the total volume of publications since the beginning of the year. While banks in Europe are beginning the process of refinancing debt, the total value of 935 billion Euros (1.349 trillion. Dollars), which was to expire in the next three years, seeking cash from any direction. The covered bonds have been at the center of attention, being regarded as a relatively inexpensive tool for the refinancing and extending the date of repayment, and, amid the credit crisis, most publications were short.
The total value of covered bonds issued since the beginning of the month are amounting to 21.9 billion, according to data of Thomson Reuters. On the other hand government guarantees have dramatically reduced the debt issues. Bonds guaranteed by the State were a major source of funds for banks this time last year, when the credit crisis had “frozen” the financial markets. Since the beginning of the year, financial institutions, as Barclays Credit Suisse, Deutsche Bank and Santander, have issued bonds totalling 16.55 billion dollars in U.S. debt market, according to data from Thomson Reuters.
The total volume of new publications on the U.S. bond market since the beginning of the year adds up to 24.57 billion dollars, with most securities being issued by banks in Europe, always based on Thomson Reuters. The U.S. bond market has always been attractive to foreign companies because of the impressive liquidity. But there is an extra bonus for European companies to sell bonds in dollars and exchange their money in Euros at this point in time.
Sources of Information: Thomson Reuters
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