EUR bank bond supply is expected to reach €450bn in 2027, a slight decrease from the €455bn forecast for 2026. The primary driver behind this supply is the high volume of bond redemptions, with nearly €400bn of bonds maturing next year, marking the highest level in a decade. The covered bond segment will see €186bn in redemptions, a historic high, while the subordinated segment will rise to €45bn, up €6bn from 2026.
The senior unsecured segment will partially offset these increases, with total redemptions reaching more than €162bn, down from over €170bn this year. Despite these varying trends, elevated redemption volumes remain the main factor influencing bank issuance in the euro bond primary market.
Macroeconomic factors, such as Eurozone GDP growth forecasted to reach 1.5% in the second half of 2027 and an additional European Central Bank rate hike in 2026, are not expected to significantly boost bank bond supply. Geopolitical instability and political concerns in France may cause periodic volatility in the market but are unlikely to strongly impact overall supply.
The 2027 supply forecast includes €185bn in covered bonds, €210bn in senior unsecured bonds, €35bn in Tier 2 supply, and €20bn in AT1 supply. The forecast reflects a €5bn drop in covered bond issuance compared to 2026, driven by pre-financing and stagnant mortgage lending forecasts. Senior unsecured supply is expected to decline by €10bn year-over-year, while Tier 2 and AT1 supplies are projected to increase by €5bn each.