Europe

Slovenská sporiteľňa’s first euro benchmark covered bond attracted strong demand from investors on Wednesday reflecting the transaction’s tempting returns in a largely negative yielding market, as well as its top credit rating.

The American lender issued a dual tranche transaction on Wednesday, its first ever euro-denominated bond. It is the first American regional bank to go to market since May 2017. Meanwhile, Aegon Bank is looking to issue its first senior non-preferred bond in the currency.

Iceland plans to defrost its euro curve with a new syndicated issue, its first since December 2017.

The European Central Bank’s (ECB) is expected to announce new policies on Thursday which, according to a fixed income strategist, will be positive for financial institution credits.

Magnitogorsk Iron and Steel Works (MMK), the second largest steel producer in Russia, released price guidance for a $500m five year bond on Wednesday at a level that one EM investor said looked “interesting”.

Schuldschein arrangers have been telling prospective borrowers to make spread ranges more attractive for lenders, if they would like the full attention of the market. With over 20 deals in the market, smaller lenders have to choose which credits to work on, often at first glance — and will be far more likely to ignore any borrower that does not offer good margins.

European corporate bond issuers have made full use of two decent days this week. Five came on Tuesday and four on Wednesday. Deals are going well, but the market is sensitive to news.

Equity investors are priming themselves for the US Federal Reserve to cut the Federal Funds Rate after dovish comments from the Fed’s chairman, Jerome Powell.

After 10 days of very scanty issuance and some weak markets, more stable conditions on Tuesday brought a salvo of five deals to the euro corporate bond market, offering a wide range of single-A and triple-B credits.

TCS Group Holding, the Russian financial services company owned by Oleg Tinkoff is to raise $300m in new GDRs to pursue profitable growth opportunities as its entrepreneurial owner takes advantage of continuing warm sentiment towards Russian equities.

The State of Schleswig-Holstein returned to the market with a 10 year note on Tuesday. Meanwhile, KfW has announced a new five year euro deal, following on from January’s record KfW book for the maturity.

The troubles faced by legendary fund manager Neil Woodford and the decision to gate one of his UK equity funds has led to discussion over the future of active management and whether Woodford’s difficulties are a serious blow to the industry. Such talk is premature.