Europe
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Dollar swap spreads tightened dramatically in the middle of the week — with bankers at a loss to explain why — but the SSA sector was still “rock solid” in one syndicate head’s words, so the currency should be open for business next week. The only two dollar trades this week — a bond market return from CDP Financial and first deal of the year from Erste Abwicklungsanstalt — both went well. -
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The common eurozone sovereign bond keeps rearing its head as a supposed solution to the monetary union’s problems.
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Financial institutions have been crushing new issue premiums by ratcheting in the pricing on new issues as they look to keep up with an impressive rally in the secondary market in February.
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Seasoned credit investors are painfully familiar with shareholder-friendly actions. Leveraged buyouts, debt-financed share buybacks and special dividends can all deliver nasty surprises to bondholders.
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The Spanish Treasury is studying the possibility of issuing green bonds — a shift from its previous position on the format — after the country’s government last week outlined a series of measures to decarbonise the economy by 2050. Spain is also adjusting its inflation-linked bond issuance strategy this year. If the sovereign does decide to issue green bonds, it is likely to find strong demand, with one of its own debt issues as well as a returning Spanish region this week being heavily oversubscribed.
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Conditions in the primary market have been nothing short of remarkable towards the end of February, with cash-rich investors chasing down new issues and letting banks get away without paying premiums. But FIG bankers say that there is one section of the market that is unlikely to be allowed to join in the party: Italy’s second tier banks. Tyler Davies reports.
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NordLB’s Luxembourg subsidiary extended its covered bond curve with a well-received five year public sector backed deal on Wednesday. But NordLB’s capital problems weighed on the performance of a covered bond deal earlier in the week from Deutsche Hypo, another of its subsidiaries.
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German industrial services company Bilfinger has launched a Schuldschein months after pulling a transaction in the public bond markets. The BB-rated company is offering a spread substantially higher than a typical Schuldschein borrower, in the hope that lenders will forego its failed bond market foray and be charitable with its chequered past.
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This Thursday was Fat Thursday, a Polish equivalent of Pancake Day, celebrated by the consumption of doughnuts. But Poland’s Ministry of Finance fed socially responsible investors a different treat this year: €2bn of green bonds.
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Dutch car leasing company LeasePlan has achieved a negative new issue premium on its first ever green bond, paving the way for the issuer to become a regular visitor to the market as it expands its electric vehicle fleet.
