Danish firms triple bond borrowing to kr. 565 billion

Over the past five years, Danish non-financial corporations have significantly ramped up their borrowing through bond issuances, tripling the total amount to kr.

565 billion.

This substantial increase contrasts with a more modest rise in traditional bank and mortgage credit institution loans, which grew by approximately one-third to kr.

1,631 billion over the same period.

The primary drivers behind this shift are large, internationally active Danish corporations such as Novo Nordisk, DSV, Carlsberg, and Ørsted.

These companies are increasingly tapping into global capital markets to fund their operations and expansion.

The bonds they issue are exclusively denominated in foreign currencies, predominantly euros, reflecting a strategic choice to access broader investor pools and potentially lower funding costs.

This reliance on foreign currency also introduces exchange rate considerations for these firms.

The bonds issued by these Danish corporations are almost entirely acquired by foreign investors, demonstrating international interest in their debt.

Much of this borrowing growth is facilitated through foreign subsidiaries, often situated in financial centers such as the Netherlands.

The capital raised through these foreign issuances is then typically channeled back to the Danish parent company via intra-group loans.

This strategy is consistent with international trends, where corporate bond issuance through entities in global financial hubs has become more prevalent, a phenomenon also observed and analyzed by the Bank for International Settlements (BIS).