DZ Bank
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Sponsored DZ BankAs Europe starts to emerge from its coronavirus lockdown, economic restrictions are being eased and banks are returning to funding in the public markets. But the environment is markedly different from that which went before. -
Issuers are starting to feel more comfortable with the new normal of wider spreads as a flurry of deals dusted the Swiss franc market, including a rare operating-company level visit from UBS.
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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.
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Nordea Bank and Erste Group Bank were marketing preferred senior bonds on Wednesday, finding demand in the seven year part of the curve following a flurry of five year deals earlier this week.
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Banco Santander and Rabobank led senior bond supply in Europe this week, both issuing well-received non-preferred deals while Crédit Mutuel Arkéa went for the preferred format. National champions and other strong banks are lining up to issue while market conditions are conducive for deals, but lesser credits remain on the sidelines.
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Banco Santander wasted no time in heading to the non-preferred senior market this week, with investors responding well to the way in which European banks have been dealing with the coronavirus pandemic in their first quarter results.
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Crédit Mutuel Arkéa paid a 'generous' 7bp of new issue premium for a preferred senior bond on Tuesday, taking advantage of a quiet market to attract attention from investors.
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A vicious move in swap spreads left investors in IFC’s $1bn social bond with one of the lowest SSA spreads to US Treasuries ever on Wednesday, and a subsequent reversal has left investors wincing. Some questioned the strategy and timing of the trade, but most simply thought that investors were the victim of circumstance.
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DZ Bank is creating a tool that will automate the process of scoring investors based on their commitment to environmental, social and governance (ESG) policies for preferential treatment in the allocation of socially responsible bonds.
