American firms are increasingly turning to euro loans for financing as the terms in Europe are more favorable than those in the US.

According to Bloomberg, in the early months of 2025, the volume of eurobonds issued by US companies reached €23.4 billion ($24.3 billion), the highest figure since 2007. Leading the charge are T-Mobile US Inc. and IBM, alongside top financial institutions from Wall Street.

The main reason for this interest is the significant disparity between the key interest rates set by central banks. The European Central Bank's (ECB) rate is 175 basis points lower than the Federal Reserve's (Fed) rate, allowing companies to save on borrowing costs, especially if they do not need to convert debt into dollars.

Last year, US corporations issued €108 billion in bonds in Europe—the largest amount in the past five years. However, demand has surged in 2025 as businesses attempt to anticipate the effects 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 only anticipated to reduce rates once (current level at 4.5%).

The rate differences are attributed to concerns about the economic situation in Europe and increasing protectionism in the US.

Last week, IBM issued €3.5 billion in bonds and subsequently raised an additional $4.75 billion in the US, totaling nine tranches. The coupon rate for five-year eurobonds stood at 2.9%, while the equivalent dollar debt had a rate of 4.8%.

T-Mobile USA also released €2.75 billion in bonds last week across three tranches. According to Bloomberg, the seven-year debt allowed the company to save about nine basis points on swaps, while other tranches were priced similarly to what T-Mobile would have experienced if raising funds in the US.

Reminder:

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