Brexit

The second deal in as many days reached the Australian dollar bond market on Thursday.

Last Friday's force 12 financial hurricane had been downgraded to a storm in a rather British tea cup by Thursday as primary capital markets dusted themselves off and reopened with deals from across the spectrum. But don't relax yet — the UK’s EU vote may prove the catalyst for a host of horrors over the summer.

The UK Debt Management Office has stressed that a plunge in Gilt yields following the UK’s vote to leave the European Union will not affect its strategy, as comments by the Bank of England governor sent rates tumbling further on Thursday.

Developing market debt has emerged as a stronghold as markets continue to adjust to the fallout from the UK’s EU referendum last week. While panic hit spreads at first, fund flows quickly returned and credit across the CEEMEA universe rallied.

Investors have been forced to think twice about buying euro-denominated UK bank paper following the country’s vote to leave the European Union, though the borrowers remain strong and spreads on their debt securities are at attractive levels.

Rentenbank sold a public trade in dollars on Thursday, the first such deal since the UK voted on June 23 to leave the European Union.

One of the smallest supranational issuers has become the first indirect casualty of this week’s swathe of downgrades for the UK sovereign, following the latter’s vote last week to leave the European Union.

The UK may have voted to leave the European Union but German’s biggest agency showed it still plans to visit the UK’s currency, as it sold the first sterling deal from an SSA since the UK’s referendum late last week.

Italy took advantage of a fall in its yields since a Brexit-induced spike late last week to print five year debt at a record low rate on Thursday, while Portugal announced plans for an exchange offer.

Investors have been forced to think twice about buying UK bank paper following the country’s vote to leave the European Union, though lenders remain strong and spreads on their debt securities appear at attractive levels.

It was high yield that sprung back to life in Asia this week, while investment grade counterparts remained on the sidelines amid a cautious environment. Market participants remain hopeful that the region’s high yield market will benefit from a possible Brexit-driven pivot from European investors, write Narae Kim and Max Bower.

The impact of the UK’s decision to abandon its European Union membership hit Asian equity capital markets with varying degrees of intensity this week, with some IPOs wobbling and others braving market jitters to launch deals. But orders have become smaller and there is a clear flight to safety among investors. Jonathan Breen and John Loh report.