Bonds and syndicated loans during the Covid-19 crisis: decoupled again?

BIS Bulletin  |  No 29  | 
14 August 2020
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Key takeaways

  • Borrowing by non-financial firms in global debt markets surged following the Covid-19 shock. Bond issuance boomed, while syndicated loan originations trailed.
  • Led by easier access to bond markets, large firms significantly increased their borrowing. The rest of the firms faced bottlenecks due to their reliance on a strained syndicated loan market and hurdles in switching to bond markets.
  • Large firms, which had lower cash buffers pre-crisis than smaller firms, used part of the fresh credit to raise their buffers in addition to meeting liquidity shortfalls.