Worries about European sovereign deficits earlier this year sparked turmoil in the markets that affected new bond issuance across the board. Last week, though, the corporate bond markets appeared happy to shrug off fresh sovereign concerns even as credit default swap spreads on Portugal and Ireland hit record highs.

Portuguese and Irish credit default swaps, effectively the cost of insurance against those countries defaulting on their government bonds, traded as high as 480 and 590 basis points respectively last week as investors placed the balance sheets of both countries under intense scrutiny and a Portuguese bond auction on Wednesday resulted in a 6.2% yield for roughly €1.2bn of debt.