Eurozone issuers turn to non-euro debt in hunt for new investors

Eurozone sovereigns have stepped up issuance in non-euro currencies — mainly US dollars and Swiss francs, but also Australian dollars and renminbi — to attract a wider pool of international investors as domestic demand ebbs. Sovereigns have issued $4.6bn of foreign-currency debt so far this year (vs $2.4bn in the same period last year), on track to exceed prior annual totals. The shift is driven by the ECB’s withdrawal from bond purchases (stopping new purchases in 2022 and ceasing replacements of maturing bonds since late 2024), which reduced domestic bid for euro debt and made foreign issuance relatively more attractive after hedging with cross-currency swaps. For issuers — especially smaller markets such as Belgium, Finland, Austria and Slovakia — foreign currency sales remain a small share of funding but can lower costs, broaden investor demand and raise market profile. The bulk of issuance remains dollar-denominated, though examples include a €250m renminbi private placement by Portugal.