Coronavirus

Equity investors expect more capital raises this week as companies seek to raise cash to support them through the Covid-19 pandemic. However, investors are demanding issuers be clear as to why they need to raise funds now.

Italy is set to announce a new decree law that would allow banks to use public guarantees to cover 90%-100% of their lending.

Investors see the rapid wave of downgrades in response to the coronavirus crisis as evidence that rating agencies are “doing their jobs”, compared to their responses during the 2008 financial crisis.

The number of year-to-date loans signed across CEEMEA more than halved compared to last year, which bankers said is a direct result of the coronavirus crisis that has engulfed countries and markets worldwide. The outlook for issuance is bleak, to the dismay of many lenders.

The corporate bond market made a blazing start to Monday with deals for Repsol, Naturgy and LafargeHolcim on screens, as issuers cram what they can into a shortened week.

Despite an unsuccessful experience in selling a trade through an auction in March, L-Bank’s international funding officer, Sven Lautenschlaeger, has not been put off by the format. He believes it is the best way to sell a bond as it gives investors the power to set the price.

The UK government has moved to bridge the gap between its two financial support schemes for businesses hampered by the coronavirus: one aimed at investment grade firms and one for small companies with revenue less than £45m.

The State of North Rhine-Westphalia (Land NRW)’s borrowing programme for the year is on the up and could reach an all-time high in response to the region’s fiscal package to counter the impact of the coronavirus pandemic.

A pair of sovereigns hit the MTN market to raise debt this week, looking for cash to meet increased borrowing requirements as they grapple with the coronavirus pandemic. Israel came to the MTN market this week printing paper to helpfund its Covid-19 response, while Ireland ventured out to the ultra-long end of the curve to print its fourth century bond.

Amadeus, the Spanish provider of IT to the travel and tourism industries, has completed a €1.5bn financing involving the simultaneous sale of new stock and convertible bonds to protect its balance sheet after a fall in demand due to Covid-19.

The European Mortgage Federation and European Covered Bond Council (EMF-ECBC) has established a task force to address the economic impact of the Covid-19 pandemic. The initiative emerges at the same time as the European Banking Authority’s publication of guidelines on the treatment of debt moratoria.

UK equity market participants are assessing the impact of a huge number of dividend cancellations or postponements. It is another layer of fundamental disruption to business as usual, brought about by the coronavirus pandemic, and one which could have wider repercussions.