Brexit

The Bank of England won’t impose a capital buffer meant to counteract the creation of credit bubbles, citing an increasingly fragile British economic outlook after the nation voted to leave the European Union.

The parlous condition of the European banking system keeps coming back to haunt the global economy, with the latest attack of lurgy coming from Brexit. The UK electorate’s vote to leave the EU has laid bare the weak credit quality of lenders, a state of affairs that needed little revealing.

UK advertisement operator Exterion Media had begun offering term loans earlier in June, but the deal is now off the table as the UK's vote to leave the EU claims a victim in the leveraged finance markets.

Groupe Poult, the French biscuit maker, on Wednesday opened syndication for a €230m loan for its merger with Dutch waffle specialist Banketgroep. The deal priced wider than it would have before the UK's Brexit vote, according to a lead banker.

Brexit has left many issuers sitting out of the market avoiding volatility, but given the troubling times ahead, they might be better advised to keep funding.

The result of the UK referendum on EU membership is likely to encourage Japanese triple-A investors to focus more heavily on US CLO paper, said CLO market participants this week.

While Bank of England governor Mark Carney took an admirable step to encourage UK bank lending on Tuesday, the syndicated loan market does not need more bank liquidity, it needs gutsy treasurers.

Gold and other precious metals have been major beneficiaries as safe haven investments in the wake of the UK’s Brexit vote, with gold futures this week hitting their highest level since July 2014. But some believe the wider precious metals sector has overshot.

Nederlandse Waterschapsbank will tomorrow print the first benchmark since the UK shocked markets with a vote to leave the European Union on June 23.

Orpea, the French retirement home provider, has completed a €276.5m Schuldschein deal just days after the UK voted to leave the European Union, with the deal closing oversubscribed despite upheaval across European financial markets.

As the Bank of England frees up more capital for UK banks to encourage them to lend, already under-lent loans bankers look at how M&A might boost the lackluster market.

Unrated Italian health and beauty product maker Artsana has allocated the loan funding for its 60% stake acquisition by Investindustrial, with pricing unaffected by the Brexit vote.