Why U.S. Companies Are Flooding Europe’s Bond Market in 2025 for Cheaper Capital

• Why Are U.S. Companies Borrowing in Europe?
• Which Major U.S. Firms Are Tapping the Euro Market?
• How Big Is This European Borrowing Spree?
• What’s Driving Foreign Investors Away From U.S. Bonds?
• How Does This Impact U.S. Bond Markets?
• Is the Currency Hedge Advantage Disappearing?
• What Does the Future Hold?
• Frequently Asked Questions

In a financial twist, American corporations are rushing to Europe to borrow billions in euros, capitalizing on the ECB’s rate cuts while the Fed holds steady. Verizon, FedEx, and PepsiCo lead the charge, with U.S. firms raising €116.3 billion ($134 billion) in Europe this year—just €4.4 billion shy of the annual record. Here’s why the euro bond market is the hottest ticket for U.S. debt issuers in 2025.

Why Are U.S. Companies Borrowing in Europe?

The answer boils down to one word: cost. The European Central Bank (ECB) has already begun cutting interest rates, while the Federal Reserve hasn’t budged since December. "From an issuer’s perspective, it’s cheaper to borrow in euros right now," says Gordon Shannon, a portfolio manager at TwentyFour Asset Management. With U.S. Treasury yields still hovering NEAR early July levels despite softening labor data, Europe remains the clear winner for low-cost funding.

Which Major U.S. Firms Are Tapping the Euro Market?

The trend isn’t isolated—it’s a full-blown corporate migration. Verizon just sold €2 billion ($2.31 billion) in European bonds, its first deal there since early 2024. FedEx and PepsiCo followed suit in July, returning to the euro market for the first time since 2021. These moves aren’t just refinancing plays; they’re strategic shifts to lock in lower rates across the Atlantic.

How Big Is This European Borrowing Spree?

Massive. As of August 2025, U.S. companies have raised €116.3 billion in Europe—just €4.4 billion short of the full-year record with five months still remaining. To put this in perspective, July alone saw $9 billion in euro-denominated debt issued by U.S. firms, triple the $3 billion monthly average from 2022-2024. Meanwhile, European companies borrowed just $2 billion in U.S. dollars last month, a dramatic drop from their typical $13 billion average.

What’s Driving Foreign Investors Away From U.S. Bonds?

Politics meets finance. TD Securities strategist Hans Mikkelsen points to the TRUMP administration’s latest tariff announcements as another reason foreign investors are cooling on U.S. corporate debt. "There’s less demand for U.S. bonds and more appetite for non-U.S. paper," Mikkelsen notes. This shift creates a self-reinforcing cycle—as global buyers pivot toward European bonds, U.S. companies must follow the money.

How Does This Impact U.S. Bond Markets?

Paradoxically, the European exodus is strengthening U.S. bond valuations. High-grade corporate bond spreads hit just 0.76 percentage points in late July—the tightest level of 2025. JPMorgan’s John Servidea explains: "With net supply down and more issuance moving to Europe, the technicals for U.S. credit remain positive." Translation? Fewer bonds in the U.S. market means higher prices for those that remain.

Is the Currency Hedge Advantage Disappearing?

For now, the savings are real—but time-sensitive. Companies that hedge their euro exposure still see meaningful cost benefits, though this gap may narrow if Fed cuts materialize. The BTCC research team notes that currency swaps currently preserve about 80% of the interest rate advantage when converting euro debt back to dollars.

What Does the Future Hold?

All signs point to continued European borrowing dominance in 2025. Between the ECB’s dovish stance, tariff tensions, and favorable market technicals, the calculus for U.S. companies is clear. As one Wall Street trader quipped: "When the Fed zigs, Europe zags—and smart CFOs follow the money."

This article does not constitute investment advice.

Frequently Asked Questions

Why are U.S. companies issuing bonds in Europe?

U.S. corporations are taking advantage of lower interest rates in Europe, where the ECB has begun cutting rates while the Federal Reserve maintains higher rates.

How much have U.S. firms raised in European bonds this year?

As of August 2025, U.S. companies have raised €116.3 billion ($134 billion) in Europe—just €4.4 billion short of the annual record.

Which major U.S. companies recently issued euro bonds?

Verizon, FedEx, and PepsiCo all issued euro-denominated bonds in 2025, with Verizon's €2 billion deal being its first European issuance since early 2024.

How are U.S. corporate bond markets affected by this trend?

Paradoxically, the reduced supply of U.S. corporate bonds has helped maintain tight spreads, with high-grade bond spreads reaching just 0.76 percentage points in late July 2025.