Europe's corporate bond market is fretting over increased bond issuance from hyperscalers in the autumn. These US tech giants, when they come to the market, come big. And with their spreads having widened lately, more storied issuers in the market are worried that it will impact their funding costs too. We examine what could drive such a huge slug of issuance in the next couple of months and whether those tightly priced European companies really have anything to worry about.
Canada, meanwhile, is proposing to adjust some of its regulations to make it cheaper for its banks to hold foreign covered bonds. Great news for those banks but critically, the move would also put Canada's regime on a par with the EU's — by far the biggest covered bond market. Matching EU rules is a prerequisite for the bloc to consider full regulatory equivalence. We discuss who would benefit from that, who would not, and how long it might take to have it.
Finally, one of the big themes in the bond market since the outbreak of the Iran war at the end of February has been for Gulf issuers to eschew the public bond market in favour of chunky private placements to raise funding. But, as we discover, that could be about to change. We lay out the pros and cons of public versus private market issuance, why issuers might be compelled back into the public market, and whether Gulf issuers' funding toolkit has been forever changed by the experience of the last few months.
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