In a sign of the secular shift in the functioning of the capital market, at least in Europe, Fitch Ratings has observed that corporate bond issuance exceeded banks loans in the first six months of 2012.European corporates raised €467 billion of debt funding in the first six months of the year. Corporate bond issuance accounted for 52 per cent of the funding compared with 29 per cent in 2011. Fitch said the level of corporate bond funding in 2011 was in line with the annual average since the introduction of the euro.Two Australian names selling term debt in the European bond market last week were Westfield (rated A- by S&P), which raised £450 million for ten years at a margin of 255 basis points over UK Gilts, and Coca-Cola Amatil (A-), which sold A$30 million of 10-year Eurobonds with a fixed coupon of 5.06 per cent.Bond funding far outpaces the loan market in the United States, but Fitch expects that European corporate treasurers will want to maintain good banking relationships as a safety net in times of financial difficulty. US corporates have the safety of deeper capital markets and the protection provided by Chapter 11 bankruptcy rules.So, while disintermediation has increased in Europe because of the capital and liquidity pressures being faced by banks, not to mention the cost of funding, Fitch does not expect the trend to go too far. However, Fitch observes that high-grade corporates have been able to obtain cheaper funding from bond markets.