Euro

Investors are seeing the positives from last weekend’s Italian general election — despite a strong showing for populist parties and a hung parliament result — driving the 10 year BTP/Bund spread to a tighter point than it was before the vote.

Even allowing for the pause in European corporate bond issuance caused by the volatility of global markets early in February, the month's primary activity proved to be meagre. But investors are hoping the signs for March are better.

Kommunekredit has printed a €1bn five year note — but two more SSA borrowers are lining up further out in the curve.

The State of North Rhine Westphalia broke its size record with a sustainability bond on Tuesday, printing €2.025bn and cutting 2bp from guidance to offer a skinny new issue premium.

The low rates in Europe are making the euro high yield market an attractive option for US issuers like Belden, a St Louis-based manufacturer of telecoms equipment, which is launching a new euro bond to buy back old deals in euros and dollars. More US issuers are coming to euros, say bankers and investors.

Since Danish transport and logistics company AP Møller-Maersk last visited the bond market, both Standard & Poor’s and Moody’s have downgraded its ratings and put them on negative watch. However, it still managed to issue its longest maturity deal so far in euros, alongside a tender offer.

KEB Hana Bank has closed a €120m syndicated financing for automotive parts manufacturer Hands Corp, roping in two Chinese lenders as arrangers.

A pair of chunky fundraisings in Asia have been lapped up by banks, as China National Chemical Corp (ChemChina) and Zhejiang Geely Holding Group look to wrap up syndications next week.

The results of Italy’s general election on Sunday indicated swelling support for right wing populist ideologies in Italy, but the euro SSA market appears to have accepted the result with equanimity, although only one borrower has popped its head over the parapet so far.

The SRI market is in full swing. Two borrowers are set to come to market on Tuesday, while a third is going on the road to promote its return to the format.

Austrian wood products manufacturer Egger Holzwerkstoffe sold its third hybrid capital deal on Monday, with its largest size and lowest coupon to date. At the same time, Brisbane Airport announced plans to diversify its investor base.

On Thursday, Prologis, the US-based warehouse Reit group, became the first issuer from its sector to issue a green bond, when it sold a €300m 10 year deal.