Deutsche Bank

Europe’s high grade corporate bond market pumped out deals on Tuesday, with some defensive issuers managing to print inside fair value while some of the day’s more esoteric picks had to pay up even for short maturity debt.

Public sector borrowers found plenty of demand as they hit the market with dollar deals across the curve on Tuesday. With robust demand and a favourable basis swap for euro funders, more issuers have lined up deals in the currency to follow.

Euro area banks have increased their reliance on preferred senior funding during the coronavirus crisis, fuelling speculation that some lenders may be expecting a softening of their minimum requirements for own funds and eligible liabilities (MREL).

Credit Suisse has become the first Swiss bank to issue a green bond in the euro market, and has also marketed a rare floating rate note. The trades were testament to improving market conditions and the ability for strong names to sell less common products.

Santander has surged to the front rank of the EMEA syndicated loan market since the coronavirus crisis began — the bank made a deliberate strategic push.

Five public sector borrowers are marketing dollar bonds across the curve kicking off what it is expected to be a busy week in the currency.

The Republic of Serbia hit euro markets on Monday as it worked to stack up funding for its fight against the Covid-19 coronavirus, selling a seven year bond.

Eni, the oil and gas company, became the first Italian corporate to open books on a syndicated bond since the coronavirus pandemic sent markets went haywire in March, as syndicate bankers say issuance levels will ramp up sharply in the coming days.

Deutsche Bank sold a new tier two on Monday while offering to buy back some of its non-preferred senior debt from investors. The liability management exercise will help the issuer adapt its balance sheet to a new regulatory environment amid Covid-19.

Chinese hotel company Huazhu Group has returned to the equity-linked market, raising $450m from a bond convertible into its American Depository Shares (ADS).

The UK Debt Management Office has picked the banks to lead the sale of its new October 2061 conventional Gilt, which will be its second of an unprecedented two syndications in a single calendar month.

Issuance in the financial institutions bond market had a preferred senior flavour this week, with issuers finding this the most cost-effective funding compared with other asset classes. In addition, some of them can use it to fulfil regulatory requirements.