BBVA

BBVA and DNB Bank were both looking to build towards their minimum requirements for own funds and eligible liabilities (MREL) in the euro market on Thursday, eschewing non-preferred senior issuance in favour of the cheaper preferred senior format.

The first tier two from Spain’s Unicaja Banco was more than three times subscribed this week after it entered a strong new issue market. It appeared alongside ING, which paid a slim 5bp premium to print a deal in the same asset class.

Dufry, the world’s largest travel retailer, issued €750m of senior unsecured notes on Wednesday to buy back its outstanding €700m of 4.5% notes, due in 2023, and pay back a small slice of its revolver.

Europe's high grade corporate bond new issue market has opened the week smartly, with almost €2bn of debt raised, as borrowers nip into the market before earnings blackouts interrupt new issuance.

Finland’s Mesto has signed €800m of revolving credit facility, as the industrial machinery company builds up its cash war chest in preparation for its partial demerger.

Lloyds Bank Corporate Markets was marketing its first senior unsecured bond in euros on Friday, taking advantage of a quiet primary market. The issue gave investors a ‘healthy’ new issue premium, according to a FIG banker.

Banco BPM and Abanca made use of favourable issuance conditions this week to beef up their capital buffers. The Italian lender priced the 10 year non-call five deal at a 4.25% coupon and the Spanish issuer priced its 10.5 year non-call 5.5 year bond at 4.625%.

Generali was the talk of the FIG bond market this week as it became the first west European financial institution to issue a tier two capital note in green bond format. The insurer’s pioneering spirit reaped rewards, with the green element variously estimated to have shorn 5bp-10bp from its cost of funding. That could tempt other firms to issue subordinated green debt. David Freitas reports.

Abanca Corporación Bancaria returned to the euro bond market on Thursday for its second tier two of the year. The Spanish lender was able to tighten pricing for its €300m deal by 50bp, helped by an order book that was nearly four times subscribed.

BBVA launched a senior non-preferred bond in the euro market this week as activity slowed after a busy period for new FIG issuance. The €1bn trade attracted orders of €1.8bn and gave investors a small new issue premium, according to a syndicate banker.

Assicurazioni Generali has become the first European financial institution to launch a green tier two bond. The Italian insurer attracted €3.25bn of orders, helping it to price its €750m deal about 10bp inside fair value, according to a syndicate banker.

Small cracks started to appear in the euro corporate bond market on Thursday, after a busy month, as companies launched a spate of deals. An already bulging pipeline means there will be little time for the market to catch its breath.