Bank of America

The subordinated debt market for European financials was back in full swing with four deals out on Monday morning boosted by the European Central Bank's policy decisions made last week.

Deutsche Lufthansa, Germany’s national airline, launched its first bond today since 2009, at the remarkably tight spread of 75bp over mid-swaps – showing just how valuable a loyal following of domestic investors can be.

Australian gaming products maker Aristocrat Leisure is eyeing the US market for a $1.3bn seven year senior secured term loan. The company plans to use the money to fund its acquisition of US gaming operator Video Gaming Technologies and to refinance debt.

Aluminium products manufacturer China Hongqiao Group raised HK$1.71bn ($220m) from a top up placement on Thursday night, with the deal driven by the need to improve liquidity of the shares.

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For the first time this year the supply of covered bonds issued in currencies other than the euro led primary flows. Issuers in Australia, Canada and Norway launched benchmarks in dollars and sterling leaving euro issuance trailing.

Santander and UniCredit reopened the door to the additional tier one market this week only to find what lay behind it was a very different dynamic from the one borrowers experienced before summer. An expected burst of supply is on the way and historically low coupons are causing investors to shy away from the AT1 from major European banks.

National Australia Bank attracted a high level of European demand for a dollar denominated deal on Tuesday. The unusually broad distribution paid testimony not only to the novel syndication approach, but also the tempting outright yield relative to what would have been seen in euros.

Swiss Re drew an almost four times oversubscribed order book for a debut dated dollar subordinated debt issue on Thursday. The deal showed that appetite for sub debt remains robust among investors, even following starkly reduced demand for additional tier one paper deals from Santander and UniCredit earlier this week.

Bank of America and Citi took to the euro market on Wednesday with self-led trades, pricing seven and 12 year notes respectively. More US issuers are likely to consider selling euro debt in coming weeks, drawn by access to longer dated funding and attractive pricing compared with dollars.

A trio of issuers printed oversubscribed deals in dollars this week, including the Inter-American Development Bank’s largest ever dollar global. More borrowers are eyeing issuance in the currency given the impressive levels of demand on offer, although holidays next week will make windows of issuance few and far between.

The wave of acquisition financings kicked off this week as Marathon Petroleum exploited the recent sharp rally rates and caught investors in eager mood following the August lull.