• 1000

The KPMG Debt Market Snapshot Edition Q2 2023 is here. With the aim of keeping you up to date on the latest developments and trends in Europe's financing markets, our Debt Advisory experts use current market data to discuss prominent market drivers and provide first-hand insights from daily practice. Read more in our most recent release.

Overview: Despite the fading of tailwinds from the Covid-19 recovery, European economy remained resilient, with strong demand and a tight labour market. The banking turmoil in the U.S. and Switzerland was quickly contained, indicating a more stable banking system compared to the previous quarter. As core inflation remains high, headline inflation has eased. Central banks are continuing to step up interest rates. In Q2 2023, the ECB implemented two consecutive 25bps hikes in May and June.

Growing concerns over the recessionary climate, the state of global financial markets, and the ongoing war in Ukraine have instilled caution among borrowers, making them wary of tapping the financing market. Credit conditions continue to tighten as banks become more risk-averse, borrowers' funding costs rise, and the focus on credit quality increases. Additionally, markets show that the rise in interest rates has prompted investment-grade borrowers to favour fixed-rate bonds over floating-rate loans. While some European debt markets demonstrated resilience others are still very affected by the current crisis and worries over the recessionary climate.


  • The Schuldschein Loan market saw a continuation of the positive market sentiment with an issuance volume of ~€6.3bn. In Q2 2023, 46% of the total volume issued contained ESG components, almost reaching an all-time high.
  • The Investment Grade Bond market experienced significant and robust growth in Q2 2023. This positive trend was firmly underpinned by the stability of financing costs and the unwavering demand for investments. IG bonds maintained their dominant position, accounting for an ~80% share of the total European bond market. Noteworthy, investors favoured shorter maturities, with a particular focus on bonds with tenures of up to 3 years. 
  • The High-Yield Bond market continued its recovery in the second quarter. The market recorded an issuance volume of €14.3bn, that marks an increase of ~180% YoY. This indicates a strong recovery from the extremely weak Q2 2022, when the HY market was practically closed for several weeks following the Russian invasion in Ukraine.

KPMG Debt Market Snapshot