BNP Paribas

Weaker trading conditions have done little to shake expectations for a new wave of additional tier one (AT1) supply, writes Tyler Davies, with three banks having reopened the market in emphatic fashion this week, issuing €3.1bn-equivalent of debt into more than €20bn of demand.

Conditions in the financial institutions bond market worsened this week but plenty of senior and subordinated bonds still got away. With credit spreads unpredictable, the supply outlook remains favourable, said bankers.

BNP Paribas has provided €40bn of loans to corporate clients in the eye of the Covid-19 storm, amid claims that rivals are retrenching. David Rothnie asks if balance sheet support will result in bigger corporate finance fees.

Chinese property companies continued to pile in to the dollar bond market on Wednesday, with Radiance Group Co and Powerlong Real Estate Holdings using up their remaining fundraising quotas.

Sweden’s EQT, the private equity company, has signed the largest ever ESG-linked subscription credit facility, raising hopes that the structure could become more common among PE firms.

Snam, the Italian gas network company, issued a €500m transition bond on Wednesday, which was three times oversubscribed and priced through its curve, suggesting that this controversial instrument is of interest to many investors.

Two sovereigns pulled off successful deals on Wednesday, adding to the pile of syndicated European government bond issuance this week.

Enexis, the Dutch electricity and gas grid and energy services group, issued its debut green bond on Wednesday and printed the €500m issue through its secondary curve, as a strong rally in utility debt pushes demand into regulated names.

Tom Tailor, the German fashion brand, has signed a €100m loan guaranteed by the federal and regional governments. It has also extended its existing bank line, although the company says it will not be enough to stave off insolvency at holding company level.

BPER Banca opened books for its inaugural sale of senior debt on Wednesday, giving investors their first chance to buy into a new issue from a second tier Italian bank during the Covid-19 pandemic.

Volkswagen, the German car company, has waited a long time before issuing any euro bonds from its industrial arm since the Covid-19 crisis began, but on Wednesday it broke its silence — and surprisingly, with a hybrid deal. VW has gone beyond refinancing an old hybrid and added ballast to its balance sheet, helping its ratings, which are on negative outlooks.

After three eurozone sovereigns hit the primary market on Tuesday, more supply will follow on Wednesday with Germany setting its sights on its second syndicated transaction after returning to the format in May, helping it deal with a much bigger funding programme in response to the coronavirus pandemic.