Deutsche Bank

As Lindorff's market-opening deal proved on Thursday, the European high yield market has a good chance of avoiding contagion from the wider swing away from risk in financial markets — but a comeback like the stunning rallies in January and July is unlikely.

Rarity value ensured strong demand for Bank of Nova Scotia’s return to the Swiss franc market in a week that also saw local insurer Helvetia continue its series of successful hybrid placements.

UniCredit Bank Austria (Baca) returned to the covered bond market on Tuesday to issue the first Austrian Pfandbrief since the country’s Financial Markets Authority (FMA) announced a debt moratorium on bonds issued by Heta Asset Resolution AG (HAR).

Covered bonds proved their worth this week as, despite difficult market conditions, 10 borrowers were able to collectively raise more than €8bn at levels that looked attractive compared to senior unsecured financials.

The euro market was treated to its first 10 year corporate deals in more than a month on Thursday, with Irish food producer Kerry and French utility Suez Environnement opening books.

Poland reopened the CEEMEA bond market this week after investors in search of safe havens pushed central Eastern European sovereign spreads tighter. Uncertainty over the timing of a US rate hike has left buyers wary of more typical EM names and left CEE sovereigns among the select few that could avoid paying heightened premiums.

Heineken, the Dutch brewing company, issued a €500m bond, tightening pricing as investors jumped on a rare issue by the company.

American Honda, the American subsidiary of the Japanese auto company, made its first euro appearance in two years on Thursday, becoming the second auto company to tap the euro market for fixed and floating paper this week.

Talk of Russian issuers’ bond plans has been gathering pace this week as Gazprom has mandated for a bond to be printed before the end of this year, sanctioned VEB looks to 2016 for a Panda bond, and Norilsk Nickel embarks on a series of investor meetings.

Lindorff, the Norwegian debt collection company, priced a €230m tap of its floating and fixed rate bonds on Thursday, reopening the European high yield market after the summer break in encouraging style.

Bankers are pointing to sovereigns from central Eastern Europe as the best hope for CEEMEA supply although much of the region is bound by the uncertainty of when the US will start to raise rates.

The European high yield market has a good chance of avoiding contagion from the wider swing away from risk in financial markets, according to investment strategists at Deutsche Bank.