Commerzbank

La Banque Postale and Société Générale took advantage of favourable conditions in the financial institutions bond market on Monday to launch non-preferred senior deals in euros and make progress towards completing their 2020 funding plans.

Three European companies, one of them a high yield issuer, jumped into the corporate bond market on Friday, the first to test the waters after the European Central Bank's promise the previous day to top them up with another €600bn of liquidity through its Pandemic Emergency Purchase Programme (Pepp). They found overwhelming demand, leading to fast sales, an increase and deeply negative new issue premiums.

Deal arrangers said on Monday that banks would not be dissuaded from bringing new bond deals to the market, though spread levels have started showing their first signs of weakness following an extraordinarily strong month in May.

Poland’s mBank has announced a tender offer for a maximum of €400m of its bonds, as it seeks to manage its MREL requirements.

Severn Trent, the UK water utility, achieved blowout demand on Tuesday for its sustainable bond, as bankers say the focus in the high grade market is shifting from crisis mode back to socially responsible debt.

Pfizer was at its opportunistic best this week as it issued $4bn of notes that included the lowest ever coupon on a corporate five year bond.

Turkey’s Garanti Bank has raised a $592.4m-equivalent ESG-linked syndicated loan — the first of its kind signed by a bank. The deal, despite being launched at the beginning of the coronavirus crisis, went successfully, according to bankers, following a string of refinancings by other Turkish banks.

The high grade corporate bond market saw chunky books on Tuesday, but there are concerns from some corners of the market that primary issuance is showing “serious signs of fatigue”.

It was a busy first quarter at Commerzbank’s corporate clients division, as companies rushed to secure liquidity and access Germany’s support programmes. But that division and the group as a whole made a loss in the quarter, results released on Wednesday showed, as cost of risk rose and valuations of derivative positions fell.

Europe’s high grade corporate bond market offered investors an assortment of trades this week, with some defensive issuers managing to print inside fair value, while some of the more esoteric picks had to pay up.

High grade corporate bond investors showed few signs of fatigue on Wednesday, as deals commanded comfortable oversubscription, despite the flurry of issues in recent days.

High grade corporates filled the primary bond market again on Wednesday, with issuance levels this week looking likely to hit almost €20bn on the back of record weekly European Central Bank bond buying.