A report issued by the Association for Financial Markets in Europe (AFME) highlights how European economies have benefited from an unprecedented amount of funding from capital markets in support of the economic recovery after COVID-19.
One of the key contributors to the increased level of funding was the significant growth in the issuance of social, sustainable and green bonds, which reached a record €52.2 billion in Q2 2020, driven by significant expansion in the use of social bonds.
According to the AFME report, in the quarter, European issued volumes of green bonds increased 51% quarter-over-quarter, while sustainable volumes increased 167%, and social bonds increased 872%. Social bond issuance hit an unprecedented €19.1 billion, more than the entire volume combined of 2018 and 2019. By country, France accounted for €12.3B (64%) of total European social bond issuance, followed by The Netherlands at €2B, and Spain with €1.5B.
Julio Suarez, Director of Research at AFME, said:
“During these exceptional times, European capital markets have demonstrated their ability to support economic recovery and future growth. Europe has seen a record amount of funding from capital markets instruments, predominantly fixed income securities. Our research also shows that Europe has the potential to lead an ESG recovery, with European social bond issuance reaching their highest quarterly volume to date. Listed SMEs across the continent have also benefited from access to equity capital and from record volumes of bank lending.”