Europe’s Bond Market Reopens for Only the Safest Borrowers

By Ronan Martin

March 3, 2026 at 4:16 AM EST

---

A handful of some of the safest borrowers are leading a tentative restarting of primary issuance in Europe on Tuesday, as ongoing conflict in the Middle East sends risk gauges surging.

Germany has opened books on a new euro-denominated green twin bond of its May 2041 bund, while Austria is tapping existing green notes due in 2029 and offering new 30-year debt. German development bank Investitionsbank Schleswig-Holstein makes up Tuesday’s trio of deals with a €500 million ($581 million) sale, according to separate people familiar with the offerings, who asked not to be identified.

Germany and Investitionsbank Schleswig-Holstein both have the highest AAA rating, while Austria is rated one notch lower at AA+.

The US sent conflicting messages about how long a war with Iran might last as Israel launched new air strikes on Tuesday, as the widening conflict reverberates across the Middle East and upends energy markets. US-Israeli strikes on Iran over the weekend have quickly escalated into a broader conflict and halted what had been expected to be a busy week of bond sales.

There were no deals priced in the main fund-raising markets in Europe and the US on Monday as risk gauges surged. Prior to the weekend, the majority of respondents to a Bloomberg survey on issuance expectations had expected volumes of more than €45 billion in Europe this week.

Instead, risk measures have continued to flare, with the iTraxx Crossover index of junk-rated credit default swaps, a key gauge of risk sentiment, rising nearly 12 basis points on Tuesday, according to data compiled by Bloomberg.

It could be several days before corporates are able to consider a return to debt markets, with higher-rated issuers in the sovereign and supranational space often the first to dip back in after periods of volatility.

---

View this Bloomberg article CLICK HERE