Company bond sales have ground to a halt in Europe, with August poised to end without a single offering as the sovereign debt crisis drives borrowing costs up by 40 percent.
"When spreads are moving so quickly, it's very difficult to see clearly how to price new issues," said Olivier Casanova, the head of financing and treasury at PSA Peugeot Citroen in Paris, which last sold bonds in euros on June 15. "Conditions are very volatile."
Bayerische Motoren Werke AG, the world's biggest maker of luxury vehicles, was the last non-financial company to sell debt in the common currency maturing in longer than two years, borrowing 1 billion euros ($1.4 billion) on July 22 in a bond due 2018, according to data compiled by Bloomberg. Only banks' top-rated, asset-backed covered bonds are being sold as investors seek the safest corporate securities.
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