Quality issuers with AAA credit ratings such as sovereigns, supranational banks, government agencies and blue-chip corporates found it easy to raise debt last year. Investors had the jitters and wanted safe bonds that were easy to sell. But there wasn't much high-grade paper around for them to buy because many governments had small budget deficits and were not issuing much debt.
As a result of this imbalance between supply and demand, most AAA-rated bonds issued last year ended up oversubscribed even when the rate of interest on offer was extremely low.
Many quality issuers saw the spread between their bond yields and those of government bonds such as German Bunds or US treasuries narrow to their tightest-ever levels during 2001.
| European sovereigns: projected capital markets issuance '02 | ||
| Currency | Amount (bn) | |
| Italy | euro | 146 |
| Germany | euro | 136 |
| France | euro | 83 |
| Spain | euro | 36 |
| Greece | euro | 28 |
| Belgium | euro | 23 |
| Netherlands | euro | 20 |
| Austria | euro | 12 |
| Portugal | euro | 10 |
| Finland | euro | 8 |
| Turkey | dollar | 3-Feb |
| Source: market sources | ||
Things are changing.