What pandemic recession? Despite lingering above-average inflation, still-restrictive central bank policies, and political crises in multiple parts of the world, global debt capital markets registered another robust year in 2023. They are increasingly coming to resemble their condition before Covid-19 hit.
Total global debt capital market activity improved slightly last year, hitting $8.9 trillion for the full year. That’s up 6% compared to 2022, according to Refinitiv. The number of new offerings brought to market last year hovered at around 29,300, an 8% increase compared to 2022. Issuance was weak during the fourth quarter, however, down 15% compared to the third.
High-yield offerings from issuers in the US, UK and Canada accounted for 76% of last year’s total, up from 72% in 2022. One attention-getting trend was so-called green bond issuance, which rose 10% to $422.3 billion.
Debt action also improved in the emerging markets, where corporate issuance totaled $268.4 billion, a 12% increase from a year earlier. Corporate debt issuers from India, Brazil, Thailand, and Malaysia dominated, accounting for 57% of emerging markets activity in 2023. —AN
Global & North America | Bank of America Securities
Despite volatility owing to aggressive interest rate hikes by most global central banks, debt issuance volumes held up well in most regions of the globe, according to Dealogic. North American activity remained essentially flat; while Latin American, European, and Japanese issuance increased over 10%. The Middle East posted a 39% rise, while Asia, excluding Japan, saw an 18% drop.
Bank of America Securities (BofA Securities) navigated these markets well, maintaining and expanding its league table rankings in several global and North American debt categories. It kept its No. 2 spot in global issuance volume and fee income, with 6% and 7% market shares, respectively. In global investment-grade debt, BofA retained the top position and ranked second in international debt issuance.
In the US, BofA remained second in issuance volume and revenue. Its third-place ranking in European investment-grade debt represented a jump from eighth in 2022 and rose two spots to third place in Asia excluding Japan.
Many analysts regard 2024 with cautious optimism, given waning inflation, solid global growth projections, and the potential for central bank rate cuts in the second half of the year. One catalyst for expanded debt issuance could be recovery in M&A volumes, since acquiring companies would need to tap the high-yield bond and leveraged loan markets to finance their transactions. This would likely be a bright spot for BofA, given the bank’s progress in global and US high-yield issuance, as it rose from fifth- to third-place ranking in these categories in 2023. —DS
Africa | Standard Bank
African debt issuers were locked out of the eurobond market for about two years owing to high interest rates and elevated risk profiles. For governments, this meant an increase in domestic borrowing; and corporates too looked to local markets for financing. That sparked a dramatic year-on-year increase in debt capital market issuance volumes on the continent.
“Risk remains a key factor, and that is why issuers must be agile and pick the right windows of opportunity,” says Brian Marshall, head of investment banking at Standard Bank.
Notably, Standard Bank helped Kenya avert possible default on $2 billion in eurobonds through a buyback issuance under tight market conditions. By staying close to its markets, Standard Bank has enabled corporates to attract private capital. Case in point is $1 billion in senior unsecured notes that it raised for troubled South African ports operator Transnet, an issue that was approximately threefold oversubscribed. —JN
Asia-Pacific | China Construction Bank
State-owned China Construction Bank (CCB) is the second-largest Chinese bank. Its customer-centric bond underwriting and distribution business has established a “one place and multiple centers” structure. With nearly 20 years of experience in the field, CCB is the only underwriter in China’s interbank market offering a broad range of innovative products. It actively promotes Beijing’s national strategies and facilitates the sustainability transformation of both state-owned and privately owned enterprises.
Deals in which CCB participated last year included carbon-neutrality bonds, sustainability-linked bonds, rural revitalization bonds, and energy-supply guarantee bonds. The bank also led in creative special products for nonfinancial enterprises, floating China’s first hybrid science and technology innovation bill REITs and Volkswagen’s first panda bond. —LZ
Central & Eastern Europe | Erste Group
Economic activity in Central and Eastern Europe rebounded substantially in 2023, after two difficult years owing to the pandemic-driven slump and the war in Ukraine; and Erste Group helped the region’s corporate issuers raise the funds needed to support growth. Through best-in-region debt issuances, the Vienna-based bank leveraged its leadership to secure some of the most important deals of the year.
Among these was a €600 million (approximately $656 million) package of sustainability-linked bonds for energy giant CEZ, for which Erste acted as global coordinator and green structuring adviser. Another cornerstone deal was the 2022 €500 million five-year, fixed-rate green bond issuance for Czech-based railway operator Ceske drahy. And in financial services, Erste acted as joint bookrunner on Romanian CEC Bank’s roughly $162.6 million issuance of senior nonpreferred notes. —TM
Latin America | Itaú BBA
Interest rate cuts early this year put Latin America’s central banks ahead of the interest rate cycle compared with their global counterparts. The emphasis is on stimulating growth, and guidance from the banks indicates the easing bias will continue. Brazil lowered its benchmark rate by 50 basis points in January—its fifth consecutive easing—while Chile cut rates by 100 basis points and Colombia by 25. The hope is that these moves will stimulate regional debt capital markets and build on the momentum they exhibited last year when debt issuance volume rose 10%.
As part of Itaú Unibanco, Itaú BBA is the top debt capital markets platform in Brazil, managing $15 billion in issuance across 248 transactions in 2023, for a 26% market share, according to Anbima (Brazilian Association of Financial and Capital Markets Entities). The bank’s expertise covers financing solutions in investment grade, high yield, loans, liability management, and acquisition finance across industries that include chemicals, oil and gas, technology, roadways and tolls, and real estate. Itaú BBA led a $1.1 billion project finance transaction last year in what was then the largest-ever deal in the sanitation sector, benefitting 10 million people in Rio de Janeiro. The bank also arranged the largest-ever transaction in Brazil’s telecom sector, a $250 million issue. —DS
Middle East | Emirates NBD Capital
Emirates NBD Capital (EmCap) operates one of the region’s leading debt capital markets platforms, providing comprehensive origination, structuring, and distribution expertise across a range of debt products. Debt issuance across the Middle East and North Africa (MENA) region surged 39% last year, far outpacing other regions. EmCap benefitted from the boom, managing $39 billion across 72 deals, representing an increase of 180% over its 2022 business.
EmCap ranks among the MENA league tables’ top four banks, notching 52 transactions for $38 billion in value for sovereign, corporate, and financial institutions last year. It is also active in Islamic finance, posting $2.1 billion in volume across 19 deals, for a 6% share last year, to make it MENA’s sixth-largest bank in the sector, according to Dealogic. In environmental, social, and governance (ESG) finance, EmCap raised $8 billion across 15 sustainable and green issues in the loan and debt capital markets in 2023, representing progress toward its goal of 100 billion Emirati dirhams (about $27 billion) in financings by 2030. The bank also advises clients on the use of proceeds, with a framework that includes sustainability performance targets.—DS
Western Europe | Deutsche Bank
Debt capital markets staged a solid rebound in Europe last year, growing 11% over 2022 in total deal value. While the results were partly offset by a much larger jump in equity proceeds, new debt issues provided critical support to Europe’s economy as it navigated a challenging macroeconomic landscape.
Our Best Debt Bank in Western Europe, Deutsche Bank, secured solid gains through the issuance of 443 local deals that raised $259 million in proceeds.
Among the German powerhouse’s top deals was the European Bank for Reconstruction and Development’s $2.5 billion, five-year fixed-rate note issue in January of this year, for which Deutsche Bank acted as a joint bookrunner. It also served as joint coordinator for a 2023 $3.3 billion bond offering by Deutsche Boerse, a landmark deal of the year. —TM
| Best Debt Banks | |
|---|---|
| Global | BofA Securities |
| Africa | Standard Bank |
| Asia-Pacific | CCB |
| Central & Eastern Europe | Erste Group |
| Latin America | Itaú BBA |
| Middle East | Emirates NBD Capital |
| North America | BofA Securities |
| Western Europe | Deutsche Bank |
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