Pimco: sterling bond issuance drought may be nearing end

Pimco's Ketish Pothalingam says increased M&A activity could end this year's sterling bond issuance drought.

However, the manager of the £84m Allianz Pimco Sterling Total Return fund warns this in turn could lead to companies being downgraded. “One of the strongest technicals in the sterling market this year has been the lack of issuance – there has been a 40% to 60% decline this year compared with 2009 which, admittedly, was exceptionally strong for new issues,” he says. “The global nature of many of the companies listed in the UK means they have access to the European and US bond markets and are not compelled to issue in sterling.” Pothalingam believes this will change in the wake of re...