Banks

Bank issuers led a flurry of dollar bond deals this week, as they dashed to wrap up funding before year end and ahead of the US Federal Reserve’s final meeting of 2019.

Participants in the financial institutions bond market have displayed calm in the run-up to the UK general election next week. A lingering credit premium for the country’s banks, to cover for risks related to Brexit and the economy, has left investors feeling comfortable about any likely outcome of the vote.

Bank capital experts were taken aback this week after UniCredit suggested that it would use subordinated debt to count towards its Pillar 2 capital requirements — a development that, if copied, could lead to a surge in the supply of additional tier one (AT1) and tier two bonds. It could also help financial institutions offset the negative capital impact of Basel IV. Tyler Davies reports.

National Australia Bank returned to the Canadian dollar market for the first time in over nine years this week to place the largest ever Maple callable tier two, and the first since global financial crisis.

French equipment leasing firm Kiloutou locked in an opportunistic refinancing of its loans with a new dual tranche €820m high yield bond on Thursday, easing its covenant constraints at the expense of adding call protection. At initial talk, the deal appeared to have little pricing rationale, but the market proved keen to support it, and the company added an extra €40m and priced through guidance.

The listing of Italian luxury yacht maker Sanlorenzo is due to be priced at €16, the bottom of the initial range, despite a tough market backdrop for IPOs.

Swedish Export Credit Corporation has grabbed $500m of four year paper in what will almost certainly be the last SSA syndication of 2019.

As a nascent feature of the Schuldschein market, secondary trading still hasn’t developed market norms and many remain unclear about the process.

Chemical company Lanxess has signed a €1bn sustainability-linked loan, as lenders expect next year to see huge growth in other German companies using the format.

Germany’s Volkswagen has signed a €10bn revolving credit facility, with the automobile company taking advantage of a significant oversubscription to double the size of its existing revolver.

The co-founders of Boohoo Group, the UK online fashion retailer, have offloaded £142.5m of stock.

DNB Bank made the most of a favourable backdrop in the financial institutions bond market this week, selling a short-dated senior bond in sterling after recent prints in euros and dollars.