Banks

Northern Powergrid, a rare issuer in the UK market, issued a 40 year sterling bond on Wednesday that found a strong reception, in a week that has proved patchy for issuers in the currency.

Credit Suisse has found one way to deal with low interest rates in Europe: switch into another currency. The Swiss bank has conjured up an extra Sfr250m ($250m) of net interest income (NII) per year from changing how it hedges the capital to meet its operational risk.

Swiss investors’ thirst for yield was quenched in some style at the end of last week, when Russian Railways printed the largest Swiss franc transaction of the year from an emerging market borrower.

A brutal market for auto suppliers and a string of dividend deals have left Lumileds, a maker of LED lighting and an Apollo portfolio company, staring at a leverage level which could top 14 times by year-end, according to Moody’s. The company’s loan saw the largest price fall in Europe over the last quarter, according to IHS Markit, and is now bid around 47, compared with 70 in June.

Landesbank Baden-Württemberg has long held the crown as the top Schuldschein arranger, but even as the market internationalises the Stuttgart-based bank has retained its ability to cope with deal flow, as well as push the market beyond its usual borders.

Dar Al-Arkan Real Estate Development Company has mandated eight banks to arrange a long five year Reg S benchmark sukuk and is starting the roadshow for the deal on Thursday.

The UK’s South West Water has amended the margin on a loan to be priced as a spread against Sonia just days after the Bank of England said the loan market needs to do more to prepare for the cessation of Libor.

Allied Irish Banks was met with a strong response for an additional tier one (AT1) in the euro market on Wednesday, just a month after its national peer Bank of Ireland had to pull a subordinated bond amid fears about the impact of the UK’s departure from the EU.

Swedbank and UniCredit got away with paying small new issue premiums for senior bonds this week, after utilising an extremely favourable backdrop for issuers in the euro market.

A pair of CEE corporates, Veon Holdings and NordGold, released initial price guidance for bonds on Tuesday, both offering paper after a break from international issuance.

Neoen, the French renewable energy company, returned to the capital markets on Wednesday, following its popular €697m IPO in October last year, with a debut €200m convertible bond due in 2024.

Metro Bank came back to the sterling market on Wednesday to make a second effort at selling non-preferred senior debt, raising the pricing on its offer by 200bp to 9.5%. Market participants suggested the transaction was already a ‘done deal’, but warned that the interest costs would weigh very heavily on the bank’s profit and loss statement.