The European bond market woke up after a record “summer sleep”! Issuing €38.3 billion in a single week, AI financing torrents spill out of the US

The Zhitong Finance App learned that European bond sales are rebounding strongly from the summer off-season at the fastest rate on record, continuing the rapid pace of global borrowing since this year. On Wednesday, issuers such as the Finnish government, specialty chemicals company Sika AG (Sika AG), and Mizuho Financial Group pushed for this week's bond issuance to reach at least 38.3 billion euros (about 44.5 billion US dollars). This is the busiest summer restart week since records began.

Eurobond sales usually trickle down to a trickle down in August due to bankers' and investors' vacations, and only 9 issuers completed issuing 5.8 billion euros in the first two weeks of this month, according to market compilation data.

This week marks the time when trading in the region has traditionally restarted — as Germany and Northern Europe return to work after Assumption Day on August 15. In recent years, bond issuance activities in August have been brought forward due to issuers rushing ahead of the busy issuance window in September.

Timothy Rahill, credit strategist at ING, said, “Supply started slightly earlier than in previous years, and large amounts of cash are awaiting allocation. The credit market is immune to almost all risks.”

Meanwhile, the US market shows no signs of slowing down, and tech hyperscale companies are raising hundreds of billions of dollars from the bond market to support AI infrastructure construction. The US investment-grade bond market has sold US$152 billion so far in August, hitting a new monthly high, setting a new monthly record for the third consecutive month.

These issuances are increasingly driving sales in the European market, and a flood of tech company debt is spilling over from the US to Europe.

The wave of large-scale corporate debt issuance is driving up government borrowing costs and increasing investors' concerns about geopolitics, summer heatwaves, and government deficits. Global issuers competed to issue bonds before the latest round of surging yields was transmitted to the corporate bond market.

Interest spreads are stable

Currently, the additional yield premiums that companies need to pay to attract investors to buy their bonds rather than safer sovereign bonds have remained stable. The spread on the Bloomberg Investment Grade Corporate Bond Index closed at 77 basis points yesterday, further narrowing from the level at the end of June.

In contrast, Germany issued 4 billion euros (about 4.6 billion US dollars) of bonds due in August 2056, and the winning bid yield was 3.783%, a record high in 15 years. Financial issuers, sovereign bonds, supranational bonds, and institutional bonds dominated this week's issuance volume.

According to the data, the circulation volume so far this year is 6.4% higher than the same period in 2025, and is at the highest level in recorded history in the region. If Europe were to follow the US in setting a monthly record, it would need to issue more than €101 billion in bonds.