Volkswagen Comeback Pushes Europe Bond Sales Past Trillion Euros

(Bloomberg) -- Volkswagen AG’s return from debt market exile following its 2015 diesel emissions scandal has helped propel European bond sales past 1 trillion euros ($1.2 trillion) one month earlier than in 2016.

The German carmaker has issued 16 billion euros of securities in European currencies this year, making it the most prolific corporate issuer of notes in a market running at its fastest pace on record, according to data compiled by Bloomberg. U.S. companies AT&T Inc. and General Electric Co. are Europe’s next biggest corporate borrowers, selling a combined 16 billion euros.

European borrowing costs are close to record lows after years of near-zero interest rates and central bank asset purchases created a market that favors issuers. The prospect of the European Central Bank winding down stimulus has only spurred borrowers to issue faster in case it becomes more expensive, according to Peter Charles, head of Citigroup Inc.’s European debt capital markets syndicate.

Companies "have been encouraged to issue now by the combination of current low rates, the ability to achieve long duration in some cases, as well as a concern that as the ECB reduces its asset purchases further, markets may become more volatile," he said.

Volkswagen’s first deal of the year was an 8 billion euro offering in March that ranks alongside General Electric’s similar-sized offering two months later as Europe’s largest corporate bonds of 2017. VW helped propel German corporate borrowers to the forefront of non-financial issuance in the first quarter and since then, the company has also sold its first hybrid bonds in more than two years.