Euro

The European Bank for Reconstruction and Development on Thursday nipped in front of an expected glut of euro supply next week and was rewarded as it increased a green bond from its original size target and tightened pricing.

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The European corporate bond market had to wait just one day for the first new issue of 2019. Some participants had expected volatility in the global financial markets to result in a blank first week for corporates, but finance subsidiaries of Renault and Toyota opted to start their financing for the year on Thursday.

Israel has opened the CEEMEA primary bond market for the year, mandating three banks for a euro denominated 10 year and/or long dated benchmark Reg S note.

European corporate bond issuers are already preparing to issue their first deals in the post quantitative easing era after December proved a very difficult month for those issuers who were looking to steal a march on the competition. However, conditions for January look only slightly better.

Danish logistics company Maersk opted to please all of its investors who tendered bonds as part of the company’s recent liability management exercise when it announced on Tuesday that it had increased the total amount it would buy back.

The volume of euro bond issuance from US companies fell sharply in 2018 compared to recent years. The finger of blame was quickly pointed at Trump’s tax changes, but there were other forces at play. Can the barriers be lifted in time for a better 2019? Nigel Owen reports.

The Netherlands will look to issue around €4bn-€6bn with a maturity of at least 15 years in its debut green bond, which will be sold through a Dutch Direct Auction in the second quarter of 2019.

It has only been four years, but the European bond markets have become attached to the kindly hand of Mother ECB. Quantitative easing has been like an electric motor on the market’s bicycle — in 2019, it will have to go back to doing all the pedalling itself. Can the market do it without falling off, when the road ahead is so bumpy?

France looks set to be in breach of European Union budget rules after president Emmanuel Macron promised a set of concessionary measures in an effort to quell the violent protests of the last few weeks. While, by the absolute letter of the law, France’s breach will not be as bad as Italy’s, such a situation will hardly do much to stem the rise of populism or boost the credibility of the EU.

Lower funding needs and the European Central Bank’s confirmation that reinvestments under its Public Sector Purchase Programme will go on for some time should be supportive for the SSA market in 2019, said funding officials and analysts, even after net buying under PSPP stops at the end of this year.

Danish logistics company Maersk gave investors something other than political and economic matters to consider this week when it announced a tender offer for its shortest dated euro bonds on Monday. If the current poor tone in the bond markets continues into 2019, this type of exercise could become more prevalent, writes Nigel Owen.