Unblocking the euro pipeline

Last month brought a huge EUR48.4 billion of new corporate bonds, more than half the total amount of supply one investment bank predicted for the whole year in the euro market. Matthew Attwood looks at the drivers of the trend, and finds that in one important respect, the euro market still lacks the opportunities available in dollars

The absence of liquidity was at the root of the credit crisis from its beginning in 2007. Massive deleveraging coupled with a precipitate exodus from assets associated with the US mortgage market quickly mutated into a general risk aversion, affecting even the most hardy mainstream issuers for long periods. But as January's record issuance levels in the euro corporate market show, the cash was always there to be put to work.

As risk appetite diminished over the past 18 months, many investors