Euro

Romania hit screens on Thursday morning for its second dual tranche euro benchmark of the year.

A dearth of corporate bond supply on Wednesday, due to a German public holiday, was followed by deals from airport operators in two markets on Thursday. Aéroports de Paris (AdP) opted for the domestic route, while Heathrow made its first visit to the Australian market.

Italian government bonds enjoyed a strong start to Wednesday morning as investors digested talk that the country’s budget plans could be less spending heavy than previously thought. But the buy-side was sceptical that Italy’s populist government will stick to the plans — and BTPs had already retraced some of their earlier gains by the late morning.

The Republic of Albania returned to the capital markets for the first time in three years on Tuesday, selling a euro benchmark.

Quite often, a record period of issuance comes to an abrupt halt as investors require a period of time to digest the volume of issuance, allow for some performance of the bonds they have bought and cash piles to replenish. After a record third quarter in the euro corporate bond market however, investors are keen for more.

Italy’s latest political drama is making investors nervous, and rightly so — when the leader of a country’s main governing party accuses European leaders of market ‘terrorism’, in the vein of an ‘EU equals the USSR’ conspiracy theorist, then you’d be right to dump its bonds. But the steadiness of Spanish and Portuguese govvies through all this shows not only that the term ‘eurozone periphery’ may have to be consigned to the historical dustbin, but that the firewalls erected by those same European leaders after the last sovereign debt crisis are standing firm.

Amphenol Technologies, the European subsidiary of a US fibreoptic cable connector firm, sold its first bond in euros on Monday. Despite a weaker secondary tone, demand for the 10 year deal justified the issuer’s decision to press ahead with the trade.

The Republic of Albania hit screens on Tuesday to print a €500m seven year no-grow and, in the face of strong demand, was able to pull in the spread.

Finnvera is aiming to raise an additional €500m for its funding programme this year as a result of a surge in the agency’s lending.

A decade on from the last financial crisis, rating agency Moody’s has identified a number of risky issues which may significantly affect European corporate borrowers, should another crisis occur, despite the improvements that have been made.

European corporate bond market participants are expecting a quieter week of issuance following two of the strongest weeks of 2018, but there is still plenty of opportunity among the various public holidays.

The Italian cabinet has agreed upon a budget deficit target of 2.4% of GDP for the next three years, rejecting the finance minister’s 1.6% target proposal, causing Italian assets to sell off.