Corporate supply: a return to €444bn
At a Glance
The desk interprets recent commentary suggesting a decline in corporate supply towards €444bn in 2027 as a pivotal shift in the credit landscape. Per the full note from ING, corporate issuance is expected to decrease from a record €485bn in 2026, influenced by higher rates, wider spreads, and general market volatility. This marks a significant change, with the anticipated decline offering a more supportive technical backdrop for credit spreads. As institutional traders navigate this evolving environment, new positioning will be crucial amid the expected tightness in supply.
Key Takeaways
- 01Corporate supply is expected to decline to €444bn in 2027, a significant drop from 2026's record €485bn.
- 02Higher debt costs and market volatility are anticipated to result in net supply being limited to €126bn.
- 03This situation marks the first expected reduction in net supply in several years, potentially providing support for tighter credit spreads.
- 04The market outlook is mixed, with some firms bullish on credit spreads and others expressing caution.
Full Analysis
What the desk is arguing
The desk views the forecasted drop in corporate supply back to €444bn in 2027 as indicative of tightening credit conditions. Per the full note from ING, elevated corporate issuance levels seen in 2026 are expected to ease as factors such as hyperscaler fatigue and rising debt costs weigh on the market.
ING estimates that corporate supply will decrease by approximately 8.5% from the record highs of 2026, reflecting an adjustment in market dynamics. Notably, redemptions are set to rise to €318bn, which, combined with a reduction in new issues, will contribute to a calculated net supply of just €126bn. This transition suggests a bullish case for credit spreads and marks the first expected decline in net supply in several years.
Where it sits in our coverage
With respect to credit spreads, our consensus target for 2027 is a modestly tighter environment amidst these dynamics. The current consensus estimates vary, with jpmorgan projecting a target of 1.10 for Euro-denominated bonds, while bofa is more conservative at 1.04.
This reflects a divergence within the market outlook, with jpmorgan firmly aligned with the bullish narrative stemming from ING's analysis, while bofa remains wary of potential headwinds affecting corporate credit quality.
How other firms see it
Overall, firms like jpmorgan see the drop in corporate supply as supportive for credit spreads, while firms like bofa express caution due to concerns about softness in corporate earnings and potential market volatility ahead. Their differing positions illustrate the uncertainty inherent in the upcoming months.
Investors should monitor related indicators such as the ECB's interest rate decisions and economic growth forecasts, which will significantly influence market sentiment and credit conditions moving forward.
Market Implications
Traders should watch for movements in spreads as supply tightens, particularly around the key target of €444bn in 2027. The upcoming ECB meetings could also provide critical insights into monetary policy that affects corporate borrowing costs.
From the original
Articles Corporate supply: a return to €444bn Published 10:18 Credit Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Higher rates, wider spreads, steeper curves, hyperscaler fatigue and a more volatile backdrop should see corporate supply ease modestl
Related speeches
4 itemsEuro Credit Supply: Corporate supply still hefty
The recent commentary from ING highlights a robust supply of corporate credit in April, reflecting a positive trend that surpasses historical averages for year-to-date issuance. This elevated supply could be seen as a sign of confidence among corporates in their financial health amidst a turbulent economic backdrop, potentially leading to a more favorable environment for credit markets moving forward.
Hybrid supply fades, but will stay elevated
Per the full note from ING's credit desk, corporate hybrid supply is set to fade from record highs but stay elevated, with a €35bn forecast for 2027 that sits well below recent peaks yet remains structurally supported. The argument rests on a refined refinancing calculation: first-call volumes drop to €23bn, but the unrefinanced 1H27 calls cut true 2027 needs to roughly €19bn, before an estimated €6bn of early 2028 refinancing lifts the total to €25bn—with another €10bn layered on from rising utility capex, rating-defence, M&A, and the popular new Moody's 30NC structure. The 30NC format alone accounted for €15bn, or 32% of the €46bn market in 2026, a detail that signals structural, not cyclical, demand. Because this is a credit-supply note with no tracked currency pair, our internal coverage bundle is empty—no consensus target, no firm spread, and no high-impact calendar events in the next 30 days. The desk's call is a slow-fade thesis: supply stays abundant enough to keep spread pressure on hybrids, but the peak is behind us.