American businesses are actively pursuing loans in euros, as borrowing costs in Europe are significantly lower than in the United States.

This is reported by Bloomberg.

In the initial months of 2025, they issued euro bonds worth €23.4 billion ($24.3 billion), marking the highest level since 2007. Major borrowers include T-Mobile US Inc. and IBM, along with leading banks from Wall Street.

The primary driver of this surge is the disparity between key interest rates set by central banks. The European Central Bank's (ECB) deposit rate is 175 basis points lower than that of the US Federal Reserve (Fed). This allows companies to save on borrowing costs, particularly if they do not need to convert their debt into dollars.

Last year, American corporations placed €108 billion in bonds in Europe – the largest amount in five years. However, demand for 2025 is even higher as businesses seek to anticipate the repercussions of Donald Trump's policies.

The ECB is expected to cut rates three more times this year (currently at 2.75%), while the Fed is projected to do so only once (current level at 4.5%).

The rate differential is attributed to concerns over the economic situation in Europe and rising protectionism in the US.

Last week, IBM issued bonds worth €3.5 billion, followed by raising another $4.75 billion in the US, collectively placing nine tranches. The coupon rate for five-year euro bonds was set at 2.9%, while the corresponding dollar debt carried a rate of 4.8%.

T-Mobile USA issued €2.75 billion in bonds last week across three parts. According to Bloomberg, the seven-year debt allowed the company to save around nine basis points on swaps, while other tranches were priced similarly as if T-Mobile had sought funding in the US.

Reminder:

The European Union is ready to implement corresponding measures in response to the 25% tariffs imposed by the US on steel and aluminum imports.