For any European capital markets bankers mulling their prospects in 2019, here are a couple of sobering statistics.
First, debt. Through its quantitative easing (QE) programme, the European Central Bank has been hoovering up about €8 billion to €9 billion of investment-grade corporate bonds every month, but total redemptions in the asset class in the next 12 months are expected to be just €6 billion.
Now for equity. In 2017, far from a vintage year for European ECM, there had been 17 selldowns of more than €1 billion. In 2018, there were just five.
The statistics – cited by Barclays bankers Marco Baldini and Tom Johnson at a press briefing by the bank on December 14 – set the scene for the year to come. And while Barclays was keen to pitch itself as almost uniquely suited to the conditions, the bigger picture is decidedly mixed.
More than in any other year, in Baldini’s view, 2018 showed the European corporate debt market moving away from Europe. He could not remember another year when more issuers had mandated Barclays on deals initially slated as sterling or euros, only to change tack during execution and opt for dollars.
