JPMorgan Clocks Busiest Ever Month Managing Europe Bond Deluge

(Bloomberg) -- The government bond underwriting team at JPMorgan Chase & Co. just saw a record month handling a flood of European issuance as the region seeks to borrow its way out of the pandemic.

In the month to April 21 the U.S. bank lead-managed 65 billion euros ($70 billion) in 10 issues, the most ever for a five-week period, according to Keith Price, who heads the firm’s primary sovereign, supranational and agency markets. Year-to-date it remains the most-active underwriter of European government bond sales with a market share of almost 13%, according to data compiled by Bloomberg.

The bank is riding an unprecedented wave of syndicated sovereign issuance in the region, with 167.65 billion euros of bonds sold so far in 2020 compared with 107.25 billion euros in the whole of the first half of last year.

By enlisting investment banks to place securities directly with clients, issuers can target a wider audience -- a bonus for peripheral nations plagued by weak finances that suffered a string of disappointing auctions last month. Italy’s 16 billion-euro sale last month drew orders of 110 billion euros. Spain and Portugal also attracted record demand in recent sales managed by banks.

Gross debt issuance by euro-area governments will top 1 trillion euros this year, according to JPMorgan research. That’s approximately 8-10% of the region’s gross domestic product.

With the European Central Bank and its ilk deploying trillions to bond-buying programs to ensure governments are well-funded through the coronavirus-induced recession, investors look ready to follow where central banks lead them.

“Fast actions taken by central banks at the start of this crisis have given the market confidence,” Price said in an interview. “We anticipate strong supply to continue.”

©2020 Bloomberg L.P.