(Bloomberg) -- Global companies have pulled more debt sales in the past six months than in all of 2020.
More than 70 deals have been postponed or canceled so far in 2022, according to data compiled by Bloomberg. That’s compared with 37 during the full year of 2021, and 67 in 2020.
While that’s as far back as our data goes, it’s likely been several years since so many companies withdrew from the market, given the recent era of cheap and plentiful money.
Now, financial conditions are changing fast. The biggest bond selloff in decades, soaring interest rates and out-of-control inflation are scaring companies away from making big decisions. Initial public offerings and M&A deals are also increasingly being put on hold until market turmoil subsides.
Dealmakers Buckle Up as Records Give Way to Ruptures in M&A
“Raising equity together with debt to fund acquisitions is becoming harder for companies,” said Carlo Fontana, head of global syndicate at UniCredit SpA.
When large companies come to the bond market, they’re having to accept less attractive terms. Germany’s state development bank, Kreditanstalt fuer Wiederaufbau, paid its most expensive premium yet to sell green bonds this week, showing that costs are rising sharply for even the safest of borrowers.
Green Bonds Come at an Expensive Premium for Germany’s KfW
Here are a few more takeaways from the first half:
- Bond market issuance is down 19% compared with last year.
- Issuers from Europe, the Middle East and Africa saw the largest increase in delayed transactions.
- Pulled bond sales would have added at least $21 billion to worldwide issuance.
- In the past six months, Europe has seen 32 scrapped bond deals. That compares with 25 for the whole of 2020.
- Almost half of the postponed bond deals this year were for investment-grade issuers including Canada’s Caisse de Depot et Placement du Quebec, France’s Gestion Securite de Stocks Securite SA, and Banque Ouest Africaine de Developpement.
“For Europe, the situation is even more challenging given the gas squeeze and terms of trade developments that have lifted gas and electricity prices,” according to a report by asset manager Robeco.
- Tally of Canned Europe Bond Deals Keeps Climbing as Markets Sour
Leveraged Loans Sales
- At least 13 leveraged loan deals have been withdrawn so far this year, compared with 16 for last year and 22 in 2020.
- Seven of the 13 loans were pulled last month alone. Most of them were US companies.
- This week, Montana Renewables LLC withdrew a $500 million green loan and auto-parts maker Dayco Products LLC halted a $470 million deal.
Click here for a worksheet of pulled deals including IPOs, M&As, bonds, loans and ABS in 2022.
Click here for a worksheet of postponed bonds and loans in 2021 and here for 2020.
©2022 Bloomberg L.P.