Banks

Banks are pushing out the last of this year’s equity block trades and there could even be room for more supply next week, if the UK general election delivers a market friendly result.

Investors gobbled up a high yield bond offering by US plastic packaging company Berry on Thursday, encouraging the company to increase the size twice, eventually reaching over €1bn. Berry is the only speculative grade company to issue a major bond this week in Europe, as most issuers stayed away from a market anxious about the UK general election.

Analysts at Commerzbank have criticised Markit for excluding Deutsche Bank’s innovative conditional passthrough covered bond from the iBoxx index for covered bonds. They believe the decision is “technically difficult to justify” and could discourage other banks from embracing new formats.

Activity is set to heat up in the additional tier one (AT1) bond market in 2020, with as many as 22 bonds approaching their first call dates. Market participants appear confident that conditions will allow banks to refinance and incentivise them to do so.

Indian issuers thronged the offshore bond market this year, with volumes from the country easily beating 2018 numbers. But cracks in the market have started to show. While deal flow will be strong in 2020, concerns around the health of the financial sector and the changing status of state-owned enterprises are keeping investors on edge. Morgan Davis reports.

Andrea Enria, chair of the European Central Bank’s supervisory board, has confirmed that eurozone banks will be able to include subordinated debt as part of their Pillar 2 capital requirements. The resulting 90bp improvement in common equity tier one (CET1) buffers could help to offset "unwarranted consequences" from the implementation of Basel III, he said.

Investec has entered the loan market for the third time this year, taking a $450m two year term loan from a range of international lenders.

Dongying Fangyuan Nonferrous Metals and Dongying Lufang Metals Material have stopped the syndication of a $300m loan.

The European Central Bank has the power to decide the ultimate impact of the Basel III rules in Europe.

Hebei-based steelmaker HBIS Group raised $300m from a bond this week ahead of an April maturity. It hit the market when investor confidence was shaken by recent and upcoming defaults from China.

OneConnect Financial Technology Co, a unit of Chinese conglomerate Ping An Group, reduced the size and price range of its New York Stock Exchange listing on Wednesday, a day before it was to be priced.

Chinese state-owned commodities trader Tewoo Group has announced the final results of its offshore debt restructuring, with investors accepting losses on their principals or facing delayed repayments up to 2039.