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

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.

The views expressed in this publication are those of the authors and not necessarily those of the BIS.