Falling debt issues and rising share issues

Statistical news
Datum 9 februari 2016

The fourth quarter of 2015 saw a fairly low level of capital and money market paper issues. By contrast, the equity market recorded a relatively high level of activity, also owing to ABN AMRO's IPO.

Fewer capital market issues
In the fourth quarter of 2015, Dutch institutions issued capital market paper to the total of EUR 50 billion, which was close to the low observed in recent years (Chart 1).

As is usual in the last quarter of the year, there were relatively few issues of government bonds. However, the low level of bond market issues was primarily accounted for by other financial institutions. Special purpose vehicles issued virtually no capital market paper as very few loans were securitised.   

The total amount outstanding in capital market paper in the fourth quarter of 2015 remained virtually unchanged at almost EUR 1,750 billion, despite the low level of issue activity. This was also because fewer bonds were up for redemption than in the third quarter, and bonds denominated in foreign currencies gained value on the back of the depreciation of the euro.  

Around one third of total capital market paper currently outstanding is denominated in non-euro currencies. The bulk of this is on the balance sheets of banks and special financial institutions. Fixed interest rates are usually agreed on non-euro denominated debt paper. Whereas some 30% of bonds denominated in euro carry variable rates, this applies to only around 15% of non-euro denominated bonds.  

Fewer money market issues
The money market was also characterised by relative calm in the fourth quarter of 2015 (Chart 1). Dutch institutions issued money market paper to the total of EUR 55 billion. The number of issues denominated in foreign currencies was especially low. Issue levels in non-euro money market paper came to less than EUR 18 billion in 2015Q4, some EUR 10 billion below the level seen in recent years.  

The total amount of money market paper outstanding declined as redemptions substantially exceeded gross issues. The current level of some EUR 105 billion is the lowest observed since the financial crisis. All in all, the proportion of money market paper in total debt paper outstanding shrank significantly to about 5.5% in the fourth quarter of 2015, from 9 to 10% between 2010 and 2012. The decline was mainly accounted for by banks.  

Increasing number of share issues
The equity market on the other hand saw a relatively high level of activity. In the fourth quarter of 2015, almost EUR 6 billion was raised by the issue of new shares. This is the highest amount in two years (Chart 2). Of the recent share issues, ABN AMRO's IPO stood out most. Holding company ABN AMRO Group floated about one quarter of the total number of shares, raising EUR 3.8 billion.

At the end of 2015, the total market value of shares issued by Dutch entities stood at almost EUR 750 billion. Non-financial corporations accounted for about half of the total market value, and financial holdings and financial auxiliaries were responsible for the bulk of the remainder. The contribution made by financial auxiliaries was attributable to head offices of financial groups. In addition to lending subsidiaries of Dutch parent companies, financial holdings also include subsidiaries issuing shares on behalf of foreign parent companies. These conglomerates are often not listed in Amsterdam, but elsewhere.