Euro

Despite heavy volatility in the equity markets, in fixed income, public sector bond issuers had an excellent week. A cool €10bn hit the market in tenors from five to 15 years and from all parts of the spectrum within the asset class. Lewis McLellan reports.

After being sidelined by volatility in the equity market this week, Greece made it to market on Thursday with a €3bn seven year.

American issuers old and new enjoyed the benefits of the euro investment grade corporate bond market in 2017. In comparison, 2018 has been very quiet so far, but some bankers do not expect that situation to remain for much longer.

State owned German rail operator Deutsche Bahn had a clear run at the euro investment grade corporate bond market on Thursday when it decided to sell its second bond of the year in the currency. The 15.5 year tenor it opted for extended its existing debt curve.

A plunge in global stock prices at the start of the week only closed the European investment grade corporate bond market for a day before Novartis attracted €6.5bn of combined demand for a triple tranche offering.

Anglo-Dutch consumer goods company Unilever has become known in the corporate bond markets for its multiple tranche deals. Its latest deal is its third such trade in the last three years, and investors showed they still have plenty of appetite for the name, helping the company print its largest ever deal, despite market turmoil in the US.

The European Stability Mechanism has cut more than 20% from its funding target for 2018 after approving a request from Spain to pay back €5bn of its ESM loan ahead of schedule.

State owned German rail operator Deutsche Bahn had a clear run at the euro investment grade corporate bond market on Thursday when it decided to sell its second bond of the year in the currency. The 15.5 year tenor the issuer opted for extended its existing debt curve.

The Council of Europe Development Bank (CEB) is planning to bring its second ever social inclusion bond in the spring, and has outlined to GlobalCapital the expected currency and tenor. The State of North Rhine-Westphalia also looks set to bring an SRI bond, after mandating banks on Wednesday for a roadshow.

The plunge in global stock prices has only caused the European investment grade corporate bond market to close for one day. On Wednesday, two pharmaceutical companies from different ends of the the ratings spectrum brought multi-tranche deals which attracted more than €9.5bn of combined demand.

The focus of most debate in financial markets this week has fallen on whether the equity market sell-off was merely a correction or something longer lasting and more serious. The corporate bond market, however, has viewed it all in a much more sanguine way.

A battering in the US stock market sent ripples through financial markets on Monday and Tuesday but, with stability returning, investors are keen to put money to work while higher yields are available. But one opportunity to do so was snatched away from them on Tuesday.