Europe

Covered bonds offer a way for Baltic banks to develop a new seam of long-term standalone wholesale funding. But a successful conclusion to this project will depend on whether investors are convinced there is an effective mechanism for cross-border recognition of assets.

Siemens, the German engineering group, and Fortum, the Finnish electricity company, hit the corporate bond market on Tuesday with big, multi-tranche euro deals totalling €5.5bn. Both achieved great terms at long tenors in an otherwise quiet market.

Cyprus printed a first 15 year benchmark on Tuesday, pushing out its curve and receiving orders of over €8bn. Despite the strong demand, the borrower elected to keep the size of the deal to €1bn, despite leads announcing on Tuesday morning that the size would be up to €1.5bn.

An SSA borrower smashed another set of records with a long dated bond on Tuesday. France’s hotly anticipated 30 year syndication did not disappoint, raising €7bn with its lowest yield ever at the maturity.

FSN Capital, the Northern European private equity firm, sold its remaining 6.23% stake in Danish IT services firm Netcompany, after market close with no need to offer a discount to investors.

KfW returned to the euro market with a one day tap, joining France and Cyprus in the market and extending the its stellar run of new issues in euros.

HSBC’s global banking and markets business increased its use of reserve repo and customer deposits for funding in 2018. But it endured a tough fourth quarter, with inflows from credit in its fixed income, currency and commodities (FICC) division sinking by 49.7%.

The dollar market for SSA borrowers has bounced back into life after the US holiday on Monday and Chinese New Year. Two borrowers hit screens, with more set to follow, according to bankers.

Parliamentary approval of Estonian covered bond legislation opens the way for Luminor Bank to make the first steps towards establishing a pan-Baltic covered bond market, according to the bank’s head of treasury, Max Ehrengren.

The European Banking Authority has gone to the private sector for its next appointment as chair.

Germany’s ElringKlinger has signed a €350m loan. The automotive supply company has swapped bilateral lines for syndicated lending as it looks to shore up its capital structure amid widespread upheaval in Europe’s vehicle industry.

The Estonian Financial Services Authority this week ordered Danske Bank to leave the country. The Danish lender replied that it would exit the Baltics and Russia as a whole. Meanwhile, the Estonian regulator and its Danish counterpart are under investigation for a possible breach of European Union law in relation to Danske’s money laundering scandal.