Coronavirus

Lloyds Banking Group became the first Yankee bank to access dollar funding for almost a month when it came to the market with a new senior deal on Thursday.

Three European supranationals sold bonds this week with a specific focus on supporting its member countries from the coronavirus outbreak as public sector borrowers maintain their vital role in providing emergency financing to tackle the crisis.

High grade companies poured into the bond market this week as participants weigh up whether this is a redux of 2009’s record year or if the unprecedented central bank spending and high bank liquidity mean that this is a unique market where borrowers raise cash even if they do not really need it.

Dollar high yield and convertible bond buyers dived straight into the riskiest possible end of the market on Wednesday, snapping up rescue issues for cruise operator Carnival Corporation, a firm at the centre of the coronavirus storm. Carnival pledged nearly all its ships to back bondholders’ investments, while convert investors spied a chance to double their money — if the cruise industry can bounce back. Aidan Gregory, Jon Hay, Sam Kerr and Owen Sanderson report.

Thursday’s market was heaving with SSAs printing euro deals, many of them opting for themed deals, some of which are specifically addressing the coronavirus outbreak, with bankers suggesting that these are enjoying the hottest demand.

The US Federal Reserve’s unprecedented injections of dollar liquidity calmed conditions after a chaotic month in the cross-currency swap market’s short-end, but traders are looking at its effects on the primary bond markets as the next test.

European banks broke a five year record for funding volumes in the first quarter, despite steering clear of markets for most of March. Their blistering start to the year will help them to sit out a while longer, as they wait for funding costs to settle during the coronavirus pandemic.

Private sector insurance companies have written extensive guarantees for the purchase of new aircraft from Boeing and Airbus in the past two years, filling a gap in the market left by the retreat of US Eximbank and European export credit agencies. But with aircraft around the world grounded and airlines slashing capital expenditure, these insurance firms could be stuck with the risk.

Additional tier one investors breathed a sigh of relief after regulators outlawed dividend payments this week. They argued the move made it more likely they would carry on getting the coupons on their instruments.

Mandates are rolling in for high grade corporate issuers, as syndicate bankers disagree about whether the blistering pace of the market can last.

Investment grade syndicated loan volumes in Europe have plunged almost 45% year-on-year, as the Covid-19 coronavirus tears into demand for bank credit.

As the coronavirus eats into the global economy, most companies are putting their share buy-back programmes on hold — but there are exceptions. ContourGlobal, which generates power in emerging markets, has launched a new buy-back programme, while Philips is using an unusual derivative technique to adapt its plan to crisis conditions.