Americas

Those working in capital markets have found aspects of working from home difficult. But many believe the new routines will not be put back in the box once offices are allowed to fill up again.

Bank of America reopened the market for financial institution bonds in euros this week and was followed by a slew of other deals as investors welcomed wider spreads and new issue concessions.

Issuers and investors in the Swiss franc market are grappling with much wider spreads on domestic and foreign issuers because of the volatility around the coronavirus pandemic.

US companies have smashed the all time record for bond issuance this month, as they plundered the dollar market in a headlong dash for liquidity that continued on Thursday, even though a darker record was broken: 3.3m new unemployment claims, more than four times the previous highest.

Dear reader, These are extraordinary times for global capital markets as the world reels from the spread of Covid-19.

The volume of new euro senior debt sold by banks has hit €10bn this week, following deals from Barclays, Credit Suisse and NatWest Markets on Thursday. Yield and spread levels remain high, but market participants have been delighted to see investors throwing their confidence behind new transactions in the middle of the coronavirus crisis.

Two days after saying it would take advantage of grace periods to delay coupon payments, Ecuador confirmed that it would begin negotiations with commercial and bilateral creditors around what it calls a “consensual reprofiling” of its outstanding liabilities.

Latin America bonds may not be immune to the generalised improvement in tone in credit markets this week, but that secondary markets remains dysfunctional and a return to primary market action could be some way away.

Bank of Nova Scotia issued its first dollar covered bond benchmark since 2016 on Wednesday. The deal follows a series of retained Canadian dollar covered bonds that were pledged to the Bank of Canada after it recently broadened repo eligibility to include the asset class.

Mauricio Cárdenas, Colombia’s finance minister in 2012-18, has told GlobalCapital that emerging market nations would struggle to raise the financing required to fund measures to treat the Covid-19 pandemic and consequent economic slump. “Difficult years are coming” for EM, warned the former official.

Development lender the Central American Bank for Economic Integration (Cabei) raised $170m-equivalent of three year money on Tuesday after heading to the Mexican bond market, where investors see the bank as a haven credit, the bank’s CFO told GlobalCapital.

US president Donald Trump looks unable to lead a global response to the health and economic crisis caused by the coronavirus pandemic, but the dollar is unchallenged as the global safe haven in times of crisis. This contradiction is destabilising.