AFME is pleased to circulate its Q3 2020 Government Bond Data Report.

This report provides a comprehensive data source with updated statistics on the Government bond primary and secondary markets in Europe (EU27+UK).

Report highlights include:

• Outstanding amount of green government bonds surpass EUR 60bn, with EUR 10.8 bn issued in green government bonds during Q3 2020, driven by inaugural issuance of the German and Hungarian green bonds, and the reopening of the French, Irish and Belgian green bonds. This represents the highest quarterly issuance of European green government bonds to date.

• There has been diversification in sovereign ESG issuance in Europe. The EU SURE bond issuance of EUR 17 bn is the first government bond in Europe labelled as social, while Europe’s first sustainable bond was issued in Luxembourg, with both auctions experiencing record levels of over-subscription. Total amount of outstanding ESG bonds (including bonds labelled green, social or sustainable) has reached EUR 80 bn as a result.

• There has been EUR 985 bn of European (EU+UK) bonds and bills issued during Q3 2020, while issuance has fallen 27.3% compared to the record volumes observed during Q2 2020, it remains above pre-pandemic levels as countries utilise primary market issuance to finance fiscal responses to the impact of Covid-19.

• European outstanding government debt has underwent a record maturity transformation, with longer maturity profiles a defining feature of debt issuance during Q3 2020.

• The average bid-cover ratio (demand/amount allocated) stood at 2.22 in Q3 2020, a decrease of 2.3% (QoQ) from Q2 2020 and an increase of 4.2% from Q3 2019 (YoY), suggesting sufficient investor appetite and Central Bank support for the increased volume of bonds and bills.

• During 3Q20 there were no long-term credit rating changes for European countries. This follows 4 upgrades and 1 downgrade in 1Q20, no upgrades and 2 downgrades in 2Q20, bringing the year-to-date total to 7 upgrades and 4 downgrades (so far in 4Q20 there have been 3 further upgrades and 1 downgrade).