Europe

The return of heightened market volatility this summer has cast a shadow over final few months of 2019 for equity capital markets. Investors are weighing up whether to buy new deals in at a time of heightened geopolitical risk and deteriorating macroeconomic conditions.

KfW brought its revamped green framework to the Norwegian krone market to print a deal on Tuesday. Later that week, strong demand from domestic and international investors let the issuer increase the note to a record breaking size, printing the largest Nokkie green bond across any asset class.

Europe’s candidate to take over as the next head of the International Monetary Fund received a boost this week after the body’s executive board called for the age limit to be raised and hopes receded of a rival candidate stepping forward.

Agents active in private debt markets in the UK are growing increasingly frustrated by a crop of advisory firms muscling in on their market share, often arranging deals without the need an investment bank. Some bankers allege that advisory firms don’t have the capacity to price deals effectively, and also that some do not have appropriate regulatory cover from the US regulators to pitch investors there legally.

Banks like Goldman Sachs have positioned corporate broking as part of a wider, integrated offering to clients — a strategy that appears to be the future of this traditional UK line of business, writes David Rothnie.

Canada's Equitable Bank has announced plans to issue its first covered bond, possibly as early as next year. Its decision follows an increase in Canada’s regulatory issuance limit and paves the way for several other smaller Canadian banks to follow suit.

How can capital markets professionals talk about new issue premiums when it is becoming normal for issuers to price bonds at negative yields?

Emerging market equities have had a torrid few weeks as investors sell riskier assets over fears they will suffer if US-China trade tensions exacerbating a global economic slowdown. This has limited the supply of new deals from certain countries this year but as always in EM there are pockets of opportunity and this year’s success story has been Russia.

Swedbank was supported with 14 times as much demand as it needed for a $500m additional tier one bond on Thursday, helped by falling interest rates in the US. The deal could be the first of many from European banks, which are facing up to a busy call schedule for AT1s in 2020.

The UK was over two and half times covered for a tender of long end Gilt on Thursday.

E.On, the German electricity company, ended Europe's summer lull in investment grade corporate bond issuance on Wednesday, and opened a new era in pricing, with the first ever five year bond at a negative yield. And E.On is only rated triple-B.

The summer’s long drought in international issuance in Swiss francs ended with a flourish this week. A cluster of well-received transactions were priced on Tuesday and Wednesday, all of them offering positive yields and warmly welcomed by an investor base increasingly frustrated by a diet of negative-yielding issues in the domestic market.