Danske Bank

Denmark’s banks are set for a quiet end to the year, according to bankers, as changes made to their minimum requirements for own funds and eligible liabilities (MREL) have taken the pressure off of funding.

Focus was on the public market this week, with supranationals making up the majority of MTN supply.

Argenta Spaarbank, Belfius Bank and Jyske Bank took differing approaches to sell €500m no-grow senior bonds this week — Argenta offered a substantial new issue premium, while the latter pair pushed their pricing close to fair value.

Risk appetite has returned to the high grade corporate bond market this week, as investors looked to snap up what they could before presidential election volatility and earnings blackouts create a desolate primary market.

Swedish krona SSA volumes are at a record high this year, spurred on by a handful of jumbo supranational deals sold at wider spreads during the second quarter. However, the market has since tightened, and bankers expect it to have a more muted end to 2020.

Crédit Agricole and Nykredit Realkredit were able to push aggressively on pricing in the additional tier one (AT1) market this week, as they took advantage of favourable supply and demand dynamics.

Europe’s investment grade corporate bond market saw trades from the Covid-19 rocked real estate sector on Thursday, with Immofinanz and Heimstaden Bostad attracting less demand than recent similarly rated trades.

A pair of infrequent issuers, Belfius Bank and Jyske Bank, tapped a strong market on Thursday with a pair of senior deals. The conducive environment is expected to wane as banks enter blackout periods, and prospective deals will have to vie with volatility around the US presidential election.

BNP Paribas made use of a conducive backdrop this week to build a strong orderbook for a new green non-preferred senior deal.

A trio of firsts are coming to the high grade corporate bond market this week, with a debut hybrid from Italian oil and gas firm Eni, a green first for French chemicals company Arkema and a postponed entry to the Eurobond market for Danish pharmaceutical firm Lundbeck.

Green, social and sustainable issuance has dominated the supranational and agency bond market for a whole month, consistently outpacing conventional supply. That trend looks set to continue with three SRI deals already on screens.

By offering a hefty pick-up over national champions, Bluestep Bank, a Swedish non-standard mortgage lender, attracted a hefty order book for the second deal from its newly established covered bond platform this week.