Kristiāna Janvare, Head of Signet Bank Investment Banking Department Photo: Publicity photo
Interest rates have risen really fast in the last year, and unfortunately, any of us who have any debt can feel that. This is also well illustrated by the situation with the yield of Latvian government debt securities. If the rate was at 0% in January 2022, it is currently only slightly below 4%. Savings bonds also offer a similar return, and government debt securities clearly also provide a reference point for the rates at which the companies of the given state can raise funds. It should be noted that interest rates not only on bonds, but also on bank loans have increased, so bonds as a financing instrument have not lost their attractiveness even in the current interest rate environment.
The rapid rise in interest rates and the slowdown in economic activity prompted companies to reassess their investment plans and also affected the willingness and ability of companies to borrow in the capital markets, which resulted in a rather significant decline in the activity of new corporate issues in Europe last year. However, companies are beginning to understand the new conditions and high interest rates attract the interest of investors, so the activity of new issues is renewed.
2023-10-10 14:00:21
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