Commerzbank

The euro market welcomed as many as nine new unsecured bonds from financial institutions on Tuesday, as the sector made a roaring start to the year. Attention is now turning to secondary market performance, as bankers look to see how the market absorbs the boom in supply.

Issuers rushed to open the euro covered bond market this week. Trades from ABN Amro, Erste Group and LBBW showed that investors are ready to put cash to work, but higher new issue premiums suggested that issuers were taking a 'conservative' approach at the beginning of the year.

Air France KLM has mandated banks for a five year euro bond. The appearance of an unrated issuer so early in the year is being seen as a sign of the market’s strength.

The pipeline is starting to fill in the public sector bond market with the European Investment Bank and Kommunalbanken set to bring dollar deals and KfW preparing its first euro benchmark of the year. More deals — including the first sovereign syndication of the year— are set to follow this week.

The Federal State of Lower Saxony sold the first euro public sector benchmark of 2020 with a well received 10 year deal on Thursday. Meanwhile, the European Investment Bank is keeping to tradition of beginning its benchmark funding for the year in sterling.

The covered bond market will enter 2020 on the front foot, supported by a wave of favourable forces such as the European Central Bank’s Asset Purchase Programme and low interest rates.

Analysts at Commerzbank have criticised Markit for excluding Deutsche Bank’s innovative conditional passthrough covered bond from the iBoxx index for covered bonds. They believe the decision is “technically difficult to justify” and could discourage other banks from embracing new formats.

Investec has entered the loan market for the third time this year, taking a $450m two year term loan from a range of international lenders.

Commerzbank has hired Jason Ho as its Hong Kong-based head of Greater China primary bonds, to strengthen its debt underwriting franchise in Asia and in China.

One of Banca Imi's vice presidents of loan syndications in London has joined Commerzbank's international loan origination team in Paris.

Commerzbank took advantage of a rise in yields to launch a nine year Pfandbrief on Monday. With yields rising 6bp overnight amid an improvement in risk sentiment, bankers suggested a positive yielding long seven year can expect a fair reception.

Commerzbank was careful to leave a bit of premium on the table for investors on Wednesday, as it took home €500m of seven year funding ahead of the Thanksgiving holiday in the US.