Commonwealth Bank released its 14th annual Debt Market Update, which provides institutional borrowers and investors with an overview of trends in the bond, syndicated loan and securitisation markets, and an outlook on what to watch in the year ahead.
Commonwealth Bank Managing Director Debt Markets, Simon Ling, commented on the overall resilience of capital markets despite the turbulence of geopolitical events in 2016.
“Over the past year, markets demonstrated their resilience towards shocks caused by macroeconomic events. We saw a prime example when debt capital markets demonstrated their ability to absorb the surprise outcomes of Brexit and quickly reposition to accommodate new issuances.
“Other key trends included the strong investor appetite and deep liquidity seen across all debt markets, coupled with widening spreads driven by higher funding and capital costs for financial institutions.
“We expect 2017 to be a transition year as markets digest previously unthinkable scenarios and await greater policy clarity from the US and Western Europe. During this adjustment period, we believe the market environment will be favourable for new issuances, but caution borrowers to ensure they read the signals in the market to steer clear from the pockets of volatility that will arise throughout the year,” Ling concluded.
To read the full Debt Market Update, please visit here.