Europe
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European financial institution bond markets have been rallying this year as economic weakness raised expectations of renewed European Central Bank easing action. On Thursday, it delivered a new round of bank refinancing loans — sooner than thought, but reassuring nevertheless — presaging another move tighter in southern European credit. Bill Thornhill and Tyler Davies report. -
The debate over whether the euro corporate bond market is still a poor relation of the dollar continues. Medtronic, the US-Irish maker of high tech medical devices, made a strong argument in the euro’s favour on Monday by making its debut in the currency with the kind of deal that issuers regularly bring in dollars, but that until recently was very rare or unheard of in euros. It issued six tranches of bonds totalling €7bn and the market was entirely equal to the task, producing over €30bn of demand.
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Taps in Oceanic currencies flowed freely this week as two supranationals raised funds in the Kangaroo and Kauri markets.
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Technology platforms are vying to become the first to close a fully digital Schuldschein offering — without a paper parallel — under German law. But some see the obstacle to progress not behind the beady eyes of the regulator, or the possibilities of technology, but with market participants’ customs.
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As the end of the European Parliament and Commission mandates loom, EU institutions are in a rush to close deals on as many files under the capital markets union (CMU) as possible. But while everyone likes the idea of a CMU, no one is sure how to implement it.
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The Asian Development Bank broke two records on Thursday as it printed its biggest sterling deal to date and took non-UK SSA issuance in the currency to a record level for a half year. Supply is likely to take a breather next week owing to some crucial Brexit votes in the UK Parliament, but SSA bankers are confident the market will not take long to spark back into life.
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Public sector borrowers are set to enjoy yet more enviable funding conditions in euros, with central banks on an even more dovish path than before. At least one benchmark is in the pipeline for next week, while this week a core eurozone issuer sold its largest ever deal.
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Two Turkish borrowers hit the market on Thursday, following in the wake of a Koç Holding trade earlier in the week and making it Turkey’s busiest week for deals in almost three years.
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Dollar SSA issuance is expected to pick up next week, thanks to a change in the euro/dollar basis swap that is making issuance in the currency more attractive for euro funders. There was still a smattering of dollar trades this week, including a Sofr-linked floater that broke new ground for the format.
