European bankers are expecting mergers and acquisition-related deals to account for as much as half of debt business this year, a huge leap from the level of less than 10% last year.

Their expectations are being borne out already. A fortnight into the year, European debt bankers are working on two big European refinancing deals. Telefónica, a Spanish telecoms company which bought UK rival O2 in a £17.7bn (€25.8bn) all-cash deal, will this week open the books for €4bn ($4.8bn) worth of euro-denominated debt and a €1bn sterling tranche to refinance the purchase.