A rush to borrow has led to a clutch of records for the fixed income market. SpareBank 1 Søre Sunnmøre has now listed the 2,000th fixed income issue, and rang the bell at the start of trading today to mark this milestone.
More debt was raised on the Oslo Børs marketplaces in the first eight months of 2017 than in the first eight months of any previous year, and there is now more than 2,000 fixed income issues listed for the first time in history. Companies and the Norwegian local government sector are increasingly borrowing on Oslo Børs through the fixed income market, and the number of fixed income issues listed has grown rapidly. It is less than 10 years since the 1,000 fixed income issues mark was reached, with the 1,500 mark reached in June 2013, and the 2,000 mark now just reached.
“Listing debt gives organisations access to a broad investor base and favourable borrowing terms. Oslo Børs has increasingly become a source of debt capital and an alternative to bank loans for more and more companies and municipalities”, comments Bente A. Landsnes.
A record number of new fixed income issues from a record number of issuers has led to the fixed income market breaking a clutch of records:
- More debt has been raised on the Oslo Børs marketplaces in the course of the first eight months of 2017 than in any previous year. NOK 227 billion has been raised in new loans and increases to existing loans in this period, easily ahead of the previous record year.
- 399 new fixed income issues were listed in the first eight months of 2017, more than in the first eight months of any previous year.
- The outstanding volume of debt has passed NOK 1,760 billion, the highest amount ever.
- There are now 370 companies and municipalities with fixed income issues admitted to listing on the Oslo Børs marketplaces, with 25 new borrowers listing their first fixed income issues so far this year.
Banks, the Norwegian local government sector and a comeback for the high-yield market have helped break these records
There has been a marked recovery for high-yield fixed income issues this year, following a period when the oil crisis sent this market into hibernation. New issuers have taken over from energy companies. Many new issuers have listed their first fixed income issues, including Unicare, Norlandia Health & Care Group, Link Mobility Group, Gaming Innovation Group, American Tanker and Olympic Subsea. In addition, a number of existing borrowers have also listed new fixed income issues in this segment.
The Norwegian local government sector has flocked to Oslo Børs in recent years. The forces driving this have been the sector’s increasing borrowing requirements and the fact that listing gives municipalities access to more favourable borrowing terms. New EU regulations have also played a role, such as the Solvency II Regulation, which restricts the value of unlisted bonds that life insurance companies can hold.
66 new municipalities have listed a fixed income issue on Oslo Børs for the first time since 2014, during which period the overall value of listed local government sector debt has risen by NOK 54 billion to NOK 79 billion.
Banks are behind the growth in borrowing on the Oslo Børs marketplaces, and have never before borrowed so much through the fixed income market. The total outstanding value of the fixed income issues that banks have listed on Oslo Børs is now NOK 933 billion. This represents 71% of the total value of the fixed income issues listed, excluding government bonds.
This week the total outstanding value of mortgage bonds listed on the Oslo Børs marketplaces reached NOK 500 billion for the first time in history. Mortgage bonds reflect growth in mortgage lending by banks, since they are covered bonds with security in the form of residential mortgages.
SpareBank 1 Søre Sunnmøre listed the 2,000th fixed income issue, and today rang the bell to mark the start of trading in celebration of this milestone.
“Oslo Børs is an important institution for us and is well trusted in the marketplace. Listing on Oslo Børs increases our investor base because many of the organisations that consider lending to us want our debt to be stock exchange listed. We are able to borrow on favourable terms using a simple and efficient listing process and benefit from transparent trading”, comments Stig Brautaset, CEO of SpareBank 1 Søre Sunnmøre.
The bank listed its first fixed income issue on Oslo Børs just over 20 years ago, and currently has 11 fixed income issues listed with a combined outstanding value of NOK 1.5 billion.
