Chart of the week
The euro investment grade primary market has been particularly upbeat so far this year. Excluding financial institutions and property companies, year-to-date gross corporate issuance at the end of March stood at €97 billion, according to Barclays data.
In terms of net issuance, which is new bonds being issued minus those being redeemed, corporate investment grade volumes were slightly negative over the same period at -€8 billion. This compares with €41 billion in the first quarter of 2024. Net supply has been distinctly positive in recent years, barring 2022 when high volatility and fears stemming from rising interest rates unsettled investors and firms alike.
Our analysis
These technical factors are providing a supportive backdrop for corporate investment grade. Issuers are mainly refinancing maturing debt, without investors having to absorb net new issuance.
Meanwhile, demand remains healthy. According to JP Morgan, investment-grade net inflows totalled around €7 billion in the first quarter for funds and ETFs.
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Written on 4 April 2025. Opinions subject to change. This document has no pre-contractual or contractual value. It is provided for information purposes. The analyses and/or descriptions contained in this document should not be considered as advice or recommendations from Lazard Frères Gestion SAS. This document does not constitute a recommendation to buy or sell securities, nor does it encourage investment. This document is the intellectual property of Lazard Frères Gestion SAS - 352 213 599 RCS Paris 25, RUE DE COURCELLES - 75008 PARIS