From Dollars to Euros: A Dive into Global Credit Trend

Hosts Shankar Ramakrishnan and Bruce Clark welcome Matthew Barrett, senior credit analyst, to discuss the surge in “reverse Yankee” issuance - US companies raising debt in Europe - as AI infrastructure funding drives jumbo deals and issuers seek diversification to avoid overcrowding the dollar market and rising costs. They explain how rate differentials, a tight cross-currency basis swap (around 0–5bp), and attractive all-in euro funding have pulled issuers across the pond, citing IBM’s lower euro coupons and record multi-tranche trades from Amazon and Alphabet, including landmark sterling and Swiss franc issuance. The team also explores how Middle East-driven volatility and shifting rate-hike expectations in Europe and the UK are lifting yields and new-issue concessions, slowing supply, and making timing issuance windows harder even as demand remains strong when investors are compensated. 00:00 Welcome and Guests 00:48 Reverse Yankees Explained 01:45 AI Mega Deals and Diversification 03:34 Rate Differentials and Swaps 05:38 IBM Pricing Example 06:33 Higher Rates Change Outlook 09:41 Record Deals Amazon Alphabet 11:35 Market Capacity and Demand 13:19 De Dollarization Debate 14:28 More Tranches and Tenors 15:54 Investor Preferences by Maturity 17:15 War Volatility Issuance Surge 19:25 Opportunity Versus Inflation Risk 20:25 New Issue Concessions Spike 22:22 Market Depth Comparison 24:36 Timing Windows for Issuance 26:38 Funding Needs Drive Deals 27:50 Interest Rate Expectations 29:25 Central Bank Rate Hikes 32:13 Geopolitical Inflection Point 33:57 Fed Hold vs Hike 36:59 Market Volatility Challenges 38:54 Closing Remarks Get in touch: For more information about how IGM's solutions can support your business, visit our website or contact us: https://informaconnect.com/igm/ Follow us: Keep up to date with all the latest from IGM by following us on LinkedIn:   / informa-global-markets