Volkswagen (VW), the German carmaker, attracted strong pan-European demand for its second benchmark bond of the year, fuelling hopes of a recovery in European corporate bond issuance.

The €1.5bn ($1.47bn) transaction, which was led by Barclays Capital, Commerzbank and SG, is seen by many as a litmus test of sentiment in the corporate bond market, which has been plagued by accounting scandals and credit quality fears in 2002.