European bond issue demand 'on the rise'

7 March 2012

Demand among investors for new bond issues from banks based around Europe has risen to its highest level for several months, it has emerged.

Last week, the European Central Bank made its final round of cost-effective three-year loans available to financiers across the continent in order to provide them with the necessary levels of support in the face of the ongoing eurozone debt crisis.

This process of injecting long-term liquidity into the sector, according to Reuters, helped to boost the confidence levels of professionals in the financial industry and has therefore led to investors once again seeking bonds from banks.

Indeed, the news source indicated this trend has helped lower funding costs and increase fluidity in the markets.

Chris Lees, head of European FIG DCM at Citigroup, commented that "depth is back" in the sector.

Recently, Die Welt reported that more than half of the 800 or so banks taking on three-year loans from the European Central Bank last week are based in Germany.

By Tony Aynsley

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