Programme debt Q&A: U.S. issuers entering the European market

The European market can present significant cost-savings advantages for U.S. programme debt issuers. Learn more about the opportunities and challenges of venturing into this market from our roundtable of experts.

Published: October 13, 2021

Lately, more and more U.S. issuers are looking to enter the European market. In fact, analysts at ING have forecasted that the corporate reverse yankee supply – bonds issued by U.S. companies in non-dollar currencies outside the U.S. – will reach 80 billion euros this year.1

In a recent article, ING analysts wrote: “We expect the cross-currency basis swap to tighten further and remain tight for 2021…. As a result, there will be a very attractive cost-saving opportunity for US corporates to issue EUR bonds and therefore we set our Reverse Yankee supply forecast at €80bn.”2

To better understand this phenomenon and what U.S. issuers need, we spoke with three of our programme debt experts here at U.S. Bank. They explained why the European market is so attractive and what challenges it presents. Learn more in the Q&A article below that contains insights from our three specialists:

  • Michael Whelan, U.S. Bank Global Corporate Trust senior vice president – Europe
  • Cameron Munden, U.S. Bank Global Corporate Trust vice president of business development
  • Barbara Nastro, U.S. Bank Global Corporate Trust managing director of business development

Q: What’s sparking the appetite for U.S. issuers to enter the EU market?

Nastro: One key reason is ultralow yields. Corporate yields in the euro‑denominated market remain low due to loose European Central Bank (ECB) policies in response to low inflation and growth concerns in recent years. The low, and in many cases negative, core government yields have pulled down corporate yields, meaning that average corporate funding rates in the euro market remain meaningfully lower than in the U.S. In short, U.S. companies can issue debt with lower coupons than they could by staying at home in the dollar market.

Munden: Another factor is tighter spreads. The presence of the ECB’s monthly quantitative easing bond purchases, which restarted in November, increases overall demand in the market relative to supply. This has squeezed corporate spreads, boosting the euro market’s appeal for foreign issuers. Additionally, many U.S. companies are able to issue via their European subsidiaries, meaning their bonds are eligible for inclusion in the ECB’s corporate sector purchase program (CSPP), which restarted again as part of the ECB’s monthly quantitative easing purchases.

Whelan: A third factor is cheaper cross‑currency basis swaps. Cross‑currency basis swaps are financial instruments that companies can use to convert the proceeds from a bond sale in one currency into another. The rate that companies can swap euros back into dollars cheapened in 2019, which adds to the attractiveness of accessing the low rates in the euro market, particularly for companies not necessarily requiring euro funding.


Q: What are the current challenges for U.S. issuers in Europe?

Whelan: The biggest challenge issuers face is that the process is different. It’s not the same as settlement into the U.S. via a depository trust company (DTC). Because of this, their agent in the U.S. might not have the capability to handle European issuances.


Q: So, finding the right partner is crucial for a successful European issuance. Is that correct?

Munden: Most definitely. Like Michael mentioned, it’s a much different process than settlement into the U.S. via DTC. It’s important to partner with an agent, like U.S. Bank, that has experience in the European and U.S. market. We’re able to provide expertise and guide issuers through the differences and processes to successfully execute their European issuance.

Nastro: I agree. It’s important for issuers to do their due diligence when selecting an IPA partner. Here at U.S. Bank, we have connectivity in both the U.S. and Europe, so we’re able to handle issuances in either market – or even a dual issuance into both markets.


Q: What types of technology solutions are available to help issuers manage their programme debt?

Whelan: Global issuers would benefit from the familiarity of Spans International (EU), as it will look and feel like its U.S. counterpart, Spans Online. User entitlements to both platforms will be maintained by the single “access management” group.

Nastro: At U.S. Bank, the securities processing automated notes system (SPANS) is accessible through our secure Trust Gateway Portal. Our customizable user interface gives issuers real-time, 24/7 visibility over all activity. They can access reports, confirm trades and effectively manage their programme for timely settlements and prompt payments. Users receive a demonstration of the application through our onboarding process, as well as designated, ongoing support.


It’s obvious there are significant benefits to looking to Europe for programme debt issuances. If you’re considering this opportunity, find a partner with the expertise to guide you through the process and the technology to support your needs. With the right team on your side, you can enter this market with confidence.

U.S. Bank is an experienced corporate trust provider with a solution for programme debt that provides 24/7 access, excellent client service and a future-proof mindset. 
Learn more about our European issuing and paying agent services. 




1,2 Source:
U.S. Bank Global Corporate Trust is a trading name of U.S. Bank Global Corporate Trust Limited, U.S. Bank Trustees Limited and Elavon Financial Services DAC (each a U.S. Bancorp group company). U.S. Bank Global Corporate Trust Limited is a limited company registered in England and Wales having the registration number 05521133 and a registered address of 125 Old Broad Street, Fifth Floor, London, EC2N 1AR. U.S. Bank Global Corporate Trust Limited, Dublin Branch is registered in Ireland with the Companies Registration Office under Reg. No. 909340 with its registered office at Block F1, Cherrywood Business Park, Cherrywood, Dublin 18, Ireland D18 W2X7. U.S. Bank Trustees Limited is a limited company registered in England and Wales having the registration number 02379632 and a registered address of 125 Old Broad Street, Fifth Floor, London, EC2N 1AR. Elavon Financial Services DAC  (a U.S. Bancorp Company), trading as U.S. Bank Global Corporate Trust, is regulated by the Central Bank of Ireland.  Registered in Ireland with the Companies Registration Office, Reg. No. 418442. The liability of the member is limited. Registered Office: Block F1, Cherrywood Business Park, Cherrywood, Dublin 18, Ireland D18 W2X7. Directors: A list of names and personal details of every director of the company is available for inspection to the public at the company’s registered office for a nominal fee. In the UK, Elavon Financial Services DAC trades as U.S. Bank Global Corporate Trust through its UK Branch from its establishment at 125 Old Broad Street, Fifth Floor, London, EC2N 1AR (registered with the Registrar of Companies for England and Wales under Registration No. BR020005). Authorised and regulated by the Central Bank of Ireland. Authorised by the Prudential Regulation Authority and with deemed variation of permission. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.
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