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Financing conditions for large companies have tightened sharply

2022-05-11T19:12:48.529Z


DECRYPTION - In the space of a few weeks, the financing conditions of major French and European groups have tightened significantly. On the bond markets, since the start of the war in Ukraine, rates have risen sharply and debt issues have become rare.


“Corporate financing rates have multiplied by five since March 1

, notes Jean-François Robin, director of research at Natixis.

The increase is much more marked than for individuals with mortgages.

“It is brutal: while in January, companies issued five-year bonds at 0.7% on average, they are indebted today at 2.4% on average.

In these uncertain times, investors are demanding higher and higher risk premiums, on top of rising interest rates.

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“They anticipate that rates will continue to rise and want to protect themselves in this way from a drop in bond prices

,” explains Blaise Bourdy, head of Origination Debt Capital Markets (DCM) at Société Générale CIB.

This premium changes according to the quality of the issuer and its sector of activity.

“The market is much more difficult and selective

,” adds Blaise Bourdy.

Companies positioned in the sectors…

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Source: lefigaro

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