Draghi’s Legacy in Credit Is a Bigger, Cheaper, Quirkier Market

Europe’s corporate bond market has been transformed since departing European Central Bank President Mario Draghi took office at the end of 2011. Here are four charts showing how 178 billion euros ($199 billion) of corporate QE and numerous attempts of easing euro-area financing conditions has reshaped the behavior of both corporate borrowers and bond investors.

The size of the euro investment-grade corporate bond market has ballooned to a record 2.4 trillion euros ($2.7 trillion) since Draghi took the helm at the ECB. This growth, turbo-charged by cheap QE era funding costs, is triggering a fundamental change in how companies in Europe borrow money: Corporate bond issuance “reflects, at least initially, a shift by some firms from loans to market-based debt funding,” the ECB said in its 2018 annual report.