This is excellent, you're Goldman Sachs when we discuss developments currently shaping markets industries in the global economy. I'm Jake, Seward Global, had of corporate communications here at the firm today. What we term at the post breaks it: business, environment, Europe, with Dennis Common, his co head of the global financing group and our investment banking division Dennis welcomed the programme thanks for having me. So, let's start with, exit of finally happened after years of waiting. What's been the reaction in the business community across Europe so far, I say the biggest reaction at this point in the development of the bricks it situation is really relief. We ve been living with multiple years of of significant uncertainty, not knowing whether would happen or not on what basis, and when

and a lot of work and preparation has gone into this ultimate decision. Now we know that breaks it will occur, but exactly how it will occur, and what will unfold from here remains. Actually a bit of uncertainty for our clients so as clients are thinking about the future. Give me an example of how a client might be thinking about financing differently in the wake of bricks. It sure so leading up to exit, obviously environmental uncertainty, you had people props, pausing or reconsidering how aggressively they were interested in making in a particular investment that would have an exposure to the UK economy or to certain types of businesses which are the supply chain. linkage. You can think of me a big industries like autos our there's, a a structural relationship between the countries in the Continental Europe and the UK, and depends What the result is in terms of the trade agreement. There remain some uncertainty in the sort of efficiency of supply chain and pricing mechanisms is still something that people have to think long and hard about so away from breaks it

the easy be has been on pause forbid this year, and rates have been at historic. Close negative in many instances are using up to in financing. Given the low rates has it has that playing up Charlotte, listen. To date, new issue volumes have exploded in Europe. We had the biggest day ever for ideas issuance in Europe. We have the biggest weak ever for I the issue is this year- a nearly a hundred billion dollars equivalent, which is an absolute Lee staggering amount of issuance in Europe for one week off you to non investment, great credit markets, the loan market in Non, I jus spaces up tenfold on a comparable year today period and the high bond markets up almost fivefold, so explosive was of new issuance across the entire credit spectrum coming out of Europe here today, so Dennis to the uninformed obviously makes sense why corporates around issuing dead at these levels monies cheap

and why not put some dead on if it, if the cost of financing a pretty low, but who the buyers give us a sense of why the yields are so low. Why the spreads so tight? What's going on in the market that bringing investors- and I think across the board. Almost all of our investing clients are buying A notable buyer is the Csp Programme of the E c b, they're, probably up to something like to hunt. billion. We think day they own sort of called five percent of the entire investment great market in Europe. They ve been a pretty savvy buyer. We observe their, therefore, but better buyer on weaker or down days, but they ve been putting substantial amounts of money to work, buying up a relatively substantial portion of the new issues, supply but participating those transactions alongside are all of our other investing client. So they are one big buyer, but lots of our clients are active so such as Europe has low rates we ve got easy monetary policy across the globe. In the U S, Japan on the earth looks high, but its historically low is there anything that stands at politically

from about eleven marketing Europe compared to some as other countries share or something draw draw the comparison. When I the non I jus stats for Europe up five and enfold for high yield and loans, US markets up to to also substantial year over year, increase but much more pronounced in Europe. I guess them sort of staggering reality of the not invest greater european credit markets. Right now is just the all in yields, so you have the I just ever higher bond deals pricing now in Europe at Sub one percent, that's the all in yield. You earn for investing in non investment, great european corporate credit. Even if you move down to single, be territory and non energy, we have deals pricing less than two percent now that sovereign just recently price a ten year transaction at a negative yield, so the story on on yields remains very much fun centre for people, but they all in most particular when you move into the leverage finance base are a bit. I popping India Tribute

there are some of the explosion in this landing oversee, partly to low rates, but also to the weakness of the european banking sector I think the driver for the all in yields is a function of underlying rates which has been driven by these pcb policy, and I think the weakness in, and the relative weakness in the european economy is a big contributor to the rates picture, but also credit spreads remain very tight as well. Technicals are very strong. There remains a global search for yield and liquidity is pouring into yield asset classes globally and indefinitely in Europe as well. So you mentioned sluggish growth across the region. That's just been a fact for, while how'd you describe, the fundamental for european corporate said are operating in that environment, how they feel and look at it

european corporates are muddling along. The general growth backdrop is marginally positive, but at the same time reasonably stable and our clients are sorted taken care of business there. There are prudently refinancing in turning out their capital structures there. Looking at strategic growth opportunities, we see a number of clients, you're thinking, bout, emanate opportunities. They can drive some inorganic growth than and when you dovetail that with this report the financing backdrop and make some of those transactions more achievable, so I think there are other reasonably stable and trying to figure out how they can drive growth, either organically or integrate Nikolay. So, as I guess, you'd parleying, this question, but how aggressive or conservative r r c owes an executive been about just putting on more debt. There is a different perspective on on debt tolerance, I would say on either side of the Atlantic, where? U S? Equity investors in particular have evidence that a higher degree of comfort would lover balance sheets than necessarily european equity masters, and, while those investor

are themselves global in nature. Now there are some differences between between the two markets, so lot of european corporates, historically slightly less lover than some of the. U S counterparts, but given really what the all in level and cost of financing is we're seeing more of our clients willing to take on that particular day, see tract of opportunities to finance or grow their business, so rates allow

we'll stay that way for a while, at least it seems so now, breakfasts resolved newest China seems to be on pause a little bit. Economic fundamentals are decent, if not super strong. So what other risks are weighing on the minds of our clients right now today, spot its corona virus does obviously impacting a sentiment. That is the sort of fear element, markets, gyrate twin fear and grieve got some elements of fear creeping into global capital markets right now, doubly some sort of pause inclination on behalf of some clients with respect to market access, but not across the board. We ve seen some good opportunities in the equity markets for clients to come to marketing and raise equity. Against this backdrop, and even today we know, notwithstanding the tape, equity markets are sharply higher, so it feels like there's very, very good momentum in global assets. Will it be credit or equity

notwithstanding the outlook which is I'd, say reasonably uncertain. In particular, we respected that health risk away from that geopolitical, which is new, dominated headlines last number months. There aren't a ton of looming issues. You a selection, will start to two way on people, as they start to figure out how to position based on which way. You know the candidates on the democratic side look to shake out, and then what that sort of relative estimates of winning successes between your Republicans Democrats, but that, I think, is something for us for the future. if we can figure out how to hold an election properly I'm still why you joined Goldman Sachs has an analyst almost twenty five years ago, one thousand nine hundred and ninety six. What would the twists and turns that led to your current role in in London? and turns you know like any career on wall. Street luck and timing was an important factor. I signed up to join one group in One thousand nine hundred and ninety five. When I arrived at the firm in nineteen ninety six, I was told that I was entering a different group group of the time called the

Cologne group, which was really the first placed the farm ever tried to make a loan or become a lender, wouldn't even have a leverage, finance group at the time, and so that was a very long time ago to think about where the firm is now. Ultimately, the group I was part of merged with another group and renamed itself leveraged finance men. So that's where that business would have began back in the in the mid to late 90s and I bounced over the securities division worked on a trading floor for a large number of years. Understanding, investors and entire sales and trading framework worked on the syndicate to ask and then bounce back to the investment banking division to run our leverage plans and then credit finance businesses or to London in just over a decade ago to help build out the institutional debt capital markets there. So am I, surround divisions. I bounced around regions, lots different jobs, but all the extremely exciting. So if you, talking to analyse, starting today, other than warning them to have good luck. What other advice would you give them look I'd

I tell them that it is never too early to start building relationships. That's not necessarily the job of the quote: unquote: senior bankers or senior salespeople. If you start investing in that process, burly in your career, you can have a very robust set of relationships: meal. Five, ten fifteen twenty one five years later, and so at the end of the day, this is a client business relationship. Business Idaho urge first sure analysed to start dub practising their relationship building skills get after an early. some of the narrative wells. I knew it when I was younger, turned out to be pretty important these days, so never actually never now than ever now, so Dennis thanks for joining us today, thanks rather make great to be here. That concludes sat beside of exchange, the Goldman Sachs thanks for listening and a few and joy the show we hope you subscribe and apple pod cats and leave a rating or a comment in for more from Goldman Sachs experts as well. Influential policymakers, academics and investors be sure to check out or other pod gas top of Minor Goldman Sachs hosted by Alison, Nathan, a senior strategist in the firms, research division. Thank you for listening

all price references and market forecasts, correspond to the date of this recording, this podcast should not be copied distributed, published or reproduced in whole or in part. The information contained in this box ass does not constitute research or recommendation from any Goldman Sachs Entity to the listener. Neither Goldman Sachs nor any of its affiliates makes any representation or warranty as to the accuracy or completeness of the statements, or any information contained in this podcast in any liability, therefore, including in respect of direct indirect or consequential loss or damage, is expressly disclaimed. The views expressed in this pod, castor, not necessarily those of Goldman Sachs and Goldman Sachs, is not providing any financial, economic, legal, accounting or tax advice or recommendations in this pod cast. In addition, the receipt of this pod cast by any listener is not to be taken as constituting the giving of investment advice by Goldman Sachs too. That listener, nor to constitute such person a client of any Goldman Sachs Entity.