Bank of America

April is set to be the second busiest month ever in the US corporate bond market (after March), as companies pile up funding to build up their financial resilience to Covid-19, despite continuing volatility and waves of bad news.

US banks this week reported stellar returns from trading and underwriting in the first quarter, even as the bottom line was hit by gigantic writedowns and reserves for credit losses, as the economic and financial disruption from the coronavirus crisis took its toll.

US banks ramped up reserves for credit losses, expanded credit lines and enjoyed bumper trading and debt underwriting volumes in the first quarter, according to results released on Tuesday and Wednesday.

The UK’s EasyJet is about to have $500m of funds released to it, after the budget airline sent a utilisation request to its banking group at the start of the week.

European corporates found a strong bond market on Monday after raising a record amount of bond funding last week, as the European Central Bank pours money into high grade debt.

Sanofi, the French pharmaceutical company, followed the example of Danaher by reopening bonds that priced in the last few weeks. It raised another €500m on Monday, pricing well inside where it priced the original bonds at the end of March.

The corporate bond market made a blazing start to Monday with deals for Repsol, Naturgy and LafargeHolcim on screens, as issuers cram what they can into a shortened week.

Investment banking revenue in March was lower than normal as the coronavirus pandemic sapped risk appetite — but it was far from a total wipeout.

High grade companies poured into the bond market this week as participants weigh up whether this is a redux of 2009’s record year or if the unprecedented central bank spending and high bank liquidity mean that this is a unique market where borrowers raise cash even if they do not really need it.

Dollar high yield and convertible bond buyers dived straight into the riskiest possible end of the market on Wednesday, snapping up rescue issues for cruise operator Carnival Corporation, a firm at the centre of the coronavirus storm. Carnival pledged nearly all its ships to back bondholders’ investments, while convert investors spied a chance to double their money — if the cruise industry can bounce back. Aidan Gregory, Jon Hay, Sam Kerr and Owen Sanderson report.

Oil firms burst into the corporate bond market on Thursday with BP, Royal Dutch Shell and OMV opening books on multi-tranche trades, as comments from US president Donald Trump sent oil prices rocketing.

Dollar high yield buyers showed up in force for the largest priming debt opportunity provided so far by the coronavirus crisis, Carnival Corporation’s $4bn rescue offering, priced alongside a convertible and an equity capital raising on Wednesday. The package provides funds for the stricken cruise operator until November, but even if the company can’t start sailing again this year or next, investors in the new issue are first in line for the firm’s $38bn of assets.