Coronavirus

After years of being in the shade of their high yield colleagues, equity-linked bankers are emerging from the Covid-19 global pandemic as some of the biggest fee earners in the capital markets amid an issuance boom, particularly in the US, as embattled corporates scramble to raise liquidity.

The European Council announced little in the way of progress following its meeting on Thursday night, but spreads for bonds from the eurozone periphery proved more resilient than they did following the Eurogroup’s meeting two weeks ago.

The European Mortgage Federation and European Covered Bond Council has introduced new features to its harmonised transparency template (HTT) and, at the same time, its Covid-19 task force has published the first monitoring report that contains a comprehensive and up-to-date picture of all national and international policy responses.

Kookmin Bank has become the first issuer from South Korea to sell an international public bond to combat the fallout of the Covid-19 pandemic. While virus-response deals are still just a tiny part of Asia’s debt market, bankers say it is set to grow.

International capital markets are facing a reprise of one of their most eerily familiar tales in the next month: the will-they-won’t-they tension of the run-up to an Argentina default, writes Oliver West.

Mexico proved its capital market prowess with a highly oversubscribed $6bn bond this week, despite facing a wave of downgrades, concerns about the contingent liability represented by Pemex, and investor fears that the government is reacting too slowly to the Covid-19 pandemic.

The coronavirus pandemic has made for a tumultuous time in corporate finance. Banks’ relationships with long-standing clients have come under strain, with lending conditions tightening just as some companies need a sudden injection of cash like never before. Bank of America’s dealings with FTSE 100 publishing and events company, Informa, provide one example of the difficult decisions facing lenders.

Firms can spend vast amounts of time window-dressing their balance sheets to look the best they possibly can within the limits of reporting regulations. Within those limits, everything goes.

Any concerns over whether the eurozone periphery would have market access after Bund spreads yawned wider during the past week were put to bed by a combined €31bn of borrowing from Italy and Spain. The sovereigns paid what was needed to put impressive dents in their ballooning funding requirements, ahead of a hotly anticipated European Council meeting on Thursday. Lewis McLellan and Tyler Davies report.

The Asian Development Bank has become the first public sector issuer to tap the Canadian dollar market to fund its coronavirus response. In the days since the deal was placed, the value of the Canadian dollar has mirrored the rapid decline in the price of oil, which some bankers fear could put off future non-domestic issuers visiting the market.

IDB Invest, the private sector arm of the Inter-American Development Bank, took advantage of the strong momentum in the dollar public sector bond market to sell its biggest ever trade on Thursday.

Bpifrance is preparing to issue a bond which will be used to provide loans to companies in France to help them overcome the economic difficulties of the coronavirus pandemic.