Negative-yielding corporate debt disappears as euro yields hit 8-year high

div classBodysc17zpet90 cdBBJodivp Refiles to clarify headlinep

pBy Yoruk Bahcelipdivdivdiv classBodysc17zpet90 cdBBJodiv

pReuters – Yields on euro investmentgrade corporate bonds have climbed to their highest in over eight years, a widelyfollowed index showed on Friday. p

pSurging bond yields this year also means that there are no more nonfinancial corporate bonds left trading with negative yields, BofA said on Friday, down from a peak of nearly 900 billion euros last year. p

pYields on the widelyfollowed ICE BofA euro corporate index rose to 1.992 at Thursdays close, the highest since January 2014, eclipsing a peak at the start of the pandemic in early 2020. p

pThe yield has risen fourfold from around 0.50 at the start of the year as a hawkish pivot from central banks across the world has sent interest rates sharply higher.p

pRising rates has also lifted the shadow of negative yields over nonfinancial corporate debt, which peaked at nearly 900 billion euros 946.98 billion last year, BofA said. p

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ppGraphic: Euro IG corp bond yield highest since 2014 – https:fingfx.thomsonreuters.comgfxmktakvezyxaypreuro20corp20yield.pngp

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ppEuro corporate debt came under increased pressure as the European Central Bank has opened the door to 2022 rate hikes in February and the invasion of Ukraine, a much bigger risk for the blocs companies, pushed borrowing costs even higher. p

pMoney markets moved on Friday to price in over 90 bps ECB of rate hikes over the remainder of the yearp

pRising rates and high volatility in markets has all led to a sharp fall in corporate debt issuance this year. p

pA mere 93 bln equivalent of bonds have been issued in euros and sterling from European nonfinancial companies, the lowest since 2017, according to Refinitiv data to April 27.