(Bloomberg) -- Companies are selling fewer bonds for capital expenditure even as European Central Bank stimulus measures designed to boost the economy spur record issuance, according to Fitch Ratings.
Borrowers are using the proceeds to fund mergers and refinance debt instead of investing in factories and equipment, Fitch analysts Michael Larsson and Roelof Steenkamp wrote in a note, without giving details of the magnitude of the changes.
Bond sales are soaring as the ECB's asset-purchase stimulus program has suppressed borrowing costs for companies. Issuers have been reluctant to invest the proceeds into the real economy because uncertainty over the U.K.'s decision to leave the European Union and slow growth are clouding the region's economic outlook.
Issuance has topped 322 billion euros ($357 billion) this year, within reach of the record 360 billion euros sold in all of 2009, according to data compiled by Bloomberg. Euro-area gross domestic product growth slowed in the second quarter to 0.3 percent, down from 0.5 percent in the first three months of the year, while inflation rose to an annual 0.4 percent, far below the ECB's goal of just under 2 percent.
To contact the reporter on this story: Selcuk Gokoluk in London at sgokoluk@bloomberg.net. To contact the editors responsible for this story: Shelley Smith at ssmith118@bloomberg.net, Mark McCord, Neil Denslow
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