Banks

The volume of euro bond issuance from US companies fell sharply in 2018 compared to recent years. The finger of blame was quickly pointed at Trump’s tax changes, but there were other forces at play. Can the barriers be lifted in time for a better 2019? Nigel Owen reports.

Conditions have rarely been sweeter for European borrowers seeking to diversify their funding sources. Europe’s dominant private debt markets for investment grade issuers, the US private placement market and the Schuldschein, are thriving, and agents in both are on the hunt for new borrowers. Their search will better if, as expected, public bond markets have a tough 2019. Silas Brown reports.

Mergers and acquisitions in Europe are back. But what loans bankers have long hoped would be great news for their businesses is in most cases turning out to be a far less lucrative development, as companies increasingly turn to smaller banking groups to finance their acquisition plans. By Michael Turner.

Rising interest rates in the US have created a roaring market for convertible bonds. Europe’s barren market has been put to shame — it risks being the driest year for two decades. Going into 2019, Europe is likely to remain in the shade of the US, but there are hopes of an issuance rebound — that is if interest rates ever start to rise. Aidan Gregory reports.

Grainger plc, the UK residential property manager, has completed its £346m rights issue to finance its full takeover of Grip Reit, having received a high take-up from its shareholders.

The UK’s CityFibre has signed a £1.12bn debt package from seven banks, as the Goldman Sachs-linked fibre broadband infrastructure provider rolls out its nationwide competition against incumbent firms BT and Virgin Media.

The European high yield bond market is storing December’s pipeline for January, but several investors warned that demand may still be thin in the new year and that borrowers should pace their plans for issuance.

Capital instruments issued by financial institutions under previous regulatory regimes was a topic of contention in several instances this year. With regulators set to lay down further positions, legacy capital will remain on the agenda in 2019.

As central banks retreat from public markets, spreads are widening in dollars and euros, and cross-currency basis swaps are improving for international borrowers, Swiss bankers believe the good times might be returning to a market once known the world over for diversification and arbitrage.

Caius Capital and UniCredit have settled a dispute over a hybrid capital instrument issued by the latter. Caius will pay the bank an undisclosed sum, after UniCredit sought around €90m of compensation for damages back in August.

After back to back record years for non-UK sterling SSA supply, the 2019 outlook is obscured by thick Brexit fog. Nevertheless, public sector borrowers have a host of non-core currency options to tap as currency diversification becomes increasingly important.

Hungary’s latest Panda looks, at least on paper, like a club deal rather than a genuine syndicated bond, with bankers disagreeing on how the deal might have played out in the market.