Commerzbank

The relentless rise in French government bond yields this year has started to disrupt demand for French covered bonds, a trend which will hold until at least May when the country’s presidential elections are over.

Shares in UniCredit, Italy’s largest bank, closed 1.7% lower on Thursday after it unveiled the terms for its fully underwritten €13bn recapitalisation late on Wednesday.

Deutsche Pfandbriefbank (PBB) eschewed cheap four year financing provided by the European Central Bank (ECB) under its long term refinancing facility to issue a 4.5 year Pfandbrief on Wednesday. The short and rarely issued tenor was easily absorbed and offered almost 52bp more than Bunds, in contrast to a French covered bond issued on Tuesday.

Tunisia has picked three banks for a euro-denominated benchmark transaction which looks set to be only its second deal without a guarantee since 2007.

Fondo de Amortización del Déficit Eléctrico (FADE) was warmly welcomed by capital markets on Tuesday for its first benchmark in 18 months, while Asian Development Bank hit screens looking for its first syndicated euro deal in almost three years. HSH Finanzfonds also raised cash on Tuesday.

Crédit Mutuel CIC on Tuesday became the first French covered bond borrower to begin and finish pricing at a spread that was markedly through OATs in this part of the curve, but the deal was a smaller size than expected.

French supermarket chain Auchan Holding on Tuesday came to the bond market for the first time since Standard & Poor’s downgraded its ratings from A- to BBB+ in April, but demand for the credit was said to be “bullish”.

A few of Europe's smaller borrowers are trying their luck now that the storm of issuance that thronged markets through most of January has abated.

Rating: Baa3/—/BBB

UK tobacco company Imperial Brands hit the euro bond market on Tuesday for a dual tranche offering of 4.5 and eight year notes that won over three times oversubscription.

Industrial Bank of Korea (IBK) has become the latest issuer from the country to venture offshore, opting for a Reg S only format to speed up execution.

Siam Commercial Bank and the Industrial Bank of Korea both returned to the dollar bond market on Monday an extended period away.