Debt Capital Markets update 2020
We are pleased to share London Stock Exchange's Debt Capital Markets (DCM) review of 2020, trends, highlights and product development.
The update provides a review of global DCM activity, as well as key product developments and deal highlights from London Stock Exchange's markets.
Global macro dynamics
- 2020 was an active year for global debt capital markets, with capital raised up 22% compared to 2019 - as issuers raised capital to address the challenges raised by the COVID-19 pandemic or to refinance existing facilities in an accommodative rates environment.
- Issuance was led by SSA, FIG and investment grade corporate issuers. Q2 saw a peak of issuance – driven by North America and Europe.
Capital raised on London Stock Exchange
- London Stock Exchange saw a 41% increase in debt capital raised compared to 2019, its strongest year since 2015.
- Debt issuers raised a total of $703bn through 797 bonds on London Stock Exchange.
- International Securities Market (ISM) continued its growth, with capital raised in 2020 up 43%. ISM has admitted 216 bonds, raising £73.8bn from 73 issuers.
The rise (and rise) of sustainable finance and innovation through the Sustainable Bond Market
- London Stock Exchange continued to drive innovation in sustainable finance and support issuers as they transition to lower carbon and sustainable business models. Read more on our blog.
- We added a new sustainability-linked bonds segment to SBM in 2020, based on the Sustainability-Linked Bond Principles governed by ICMA and set up a Sustainable Bond Market Advisory Group, a panel of market experts to advise us on future developments, including on climate transition finance. Our fee waiver for social bonds with use of proceeds mitigating the impact of the COVID-19 pandemic was well received by issuers.
- 2020 saw landmark milestone issuances from the United Mexican States (first sovereign sustainability bond from the Americas), Egypt (first sovereign green bond from MENA), Burberry (inaugural issue in debt capital markets with a sustainability bond) and African Development Bank (at the time, the largest social bond issued). At the end of 2020, 249 bonds were displayed on London’s Sustainable Bond Market (SBM) raising £51bn by 65 issuers.
- London Stock Exchange was named Stock Exchange of the Year in the Environmental Finance Sustainable Investment Awards 2020 for “both the breadth and depth of its sustainable investment innovation, including the launch of its Green Economy Mark and sustainable bond market”.
Key updates following the end of the transition period on 1 January 2021
- Effective 1 January 2021, all sovereign, local authorities, public international bodies and an issuer benefiting from a full guarantee from any of these entities are prospectus exempt issuers based on the UK Prospectus Regulation. This exemption now applies for an issuer wishing to admit bonds to the Main Market and ISM.
- Issuers of bonds admitted to London Stock Exchange’s Main Market and International Securities Market will be able to maintain ECB collateral eligibility via admission to MTS BondVision Europe MTF (“BondVision”), subject to the securities meeting the MTS admission criteria, please see our factsheet here.
Driving digital innovation in Debt Capital Markets
- London Stock Exchange, in partnership with Nivaura, launched LSEG Flow, an end-to-end platform that aims to help digitise origination, negotiation and execution in primary debt markets. LSEG Flow is now available on the International Capital Markets Association Technical Directory here which maps the different technology solutions available in the primary bond markets.
- Through “Spark Live”, London Stock Exchange issuers can now broadcast corporate events such as capital market days, AGMs and investor presentations live and on-demand, allowing our customers to maximise their investor outreach.
To find out more about London Stock Exchange's Debt Capital Markets you can contact the Fixed Income team at email@example.com or +44 (0)207 797 3921.