Deutsche Bank

The extraordinary sight of a German public sector borrower pulling a syndication mid-week led not only led to criticism of the deal’s execution but also reawakened fears over banks' diminishing ability to take down and warehouse sovereign and sub-sovereign bonds. Craig McGlashan reports.

Deutsche Bank’s riskiest subordinated debt hit fresh lows on Thursday, and some of its rivals have been dragged into the sell-off as investors worry about certain exposures and tumbling profits.

The first missed additional tier one (AT1) coupon payment may not be the harbinger of impending doom some think, but the implications for banks’ capital costs would be severe.

As European equity markets briefly rallied on Thursday, Ford Credit Europe (FCE Bank) and Praxair stepped into the breach, printing €1.9bn of paper for a starved primary market.

Italy set bankers’ hearts aflutter this week with an early contender for deal of the year, breaking several records with a €9bn 30 year benchmark. But more importantly, the trade blasted open a hole at the long end that other sovereigns could pile through.

Concerns over the exodus of real money investors from the covered bond market were put to rest this week as a series of deals met exceptionally strong demand, with the sea change in sentiment being most conspicuous in the French sector.

The German lender can’t afford any further introspection after losing its place at the summit of European corporate finance, writes David Rothnie.

Swedbank and SEB this week launched deals that attracted the largest order books and the widest distribution of any covered bonds issued this year, along with the smallest concessions.

Hangzhou Hikvision Digital Technology raised €400m in its international bond debut on Wednesday, in what was the second euro-denominated trade by a Chinese issuer this year. But unlike China Development Bank’s (CDB) deal last week, there was little European demand for Hikvision.

Labeyrie Fine Foods, the French producer of smoked salmon and foie gras, on Wednesday sold a €80m tap of its 2021 secured notes to finance the acquisition of food producers Pére Olive and King Cuisine from Aqualande.

The rare sight of a pulled German bond issue rocked the SSA market Wednesday afternoon. The issuer blamed market conditions but there were rumblings that this was a failure of process, not context.

Kommunalbanken (KBN) are set to price the first five year dollar bond for three weeks on Wednesday while Italy’s 30 year bond was the first SSA issuance in the tenor for 2016.