European DCM At Slowest Third Quarter Pace Since 2005

European debt capital markets (DCM) issuance for August 2011 totalled $87.3bn (274 deals), down 25% on August 2010 ($115.6bn) and down 19% on July 2011 ($108.1bn), according to data provider Dealogic. This is the lowest August volume since 2007 ($65.8bn) and the lowest July/August volume since 2005 ($176.8bn).

For the year to date, European DCM volume of $1.71trillion is up 10% year-on-year despite a 9% drop in deal activity. Within Europe, only the CEE region showed an increase in deal activity 2011 so far, up 33% with 190 deals compared to 143 in the same period in 2010. Download Dealogic August 2011 DCM Review Europe

No euro-denominated corporate bonds were priced globally in August, the first month to record zero activity since 1999 when the currency was introduced. Total European corporate bond volume for August 2011 reached $3.4bn via 20 deals, down 85% on the prior month and down 74% on August 2010. It is the lowest monthly volume since August 2004 ($3.3bn).

Five of the 10 lowest months for European corporate bond volume are in August, with the lowest in August 1997 ($1.6bn).

European financial institution group (FIG) volume for August 2011 ($6.8bn) is at its lowest monthly level since $6.6bn issued in November 1997. European FIG issuance for the third quarter 2011 so far ($24.7bn) is also the lowest third quarter to date volume since 1996 ($22.4bn).

The third quarter to date is the first time that European corporate issuance ($26.9bn) is higher than European FIG volume ($24.7bn) for any July/August period on record.

On August 24, ING Groep NV issued a $2.5bn covered bond, the largest to complete globally in nearly two months. Since this deal, both Barclays Bank and The Royal Bank of Scotland have issued covered bonds at $2.9bn each, the largest since BPCE SFH’s $3.0bn bond issued in May 2011.

European covered bond volume stands at $301.9bn in 2011 year to date, the highest year to date level on record, and up 26% from the previous record of $244.1bn reached in 2010.

Deutsche Bank led the European DCM rankings for August 2011 with $8.2bn (28 deals), followed by Barclays Capital in second place ($7.6bn) and UBS ($6.1bn) in third. Deutsche Bank also tops the European DCM ranking for 2011 year to date, with $135.2bn and a 7.9% market share.