Europe

Credit Bank of Moscow printed a €500m five year bond on Tuesday, taking advantage of positive sentiment towards Russian bonds that existed early in the week before new talk of fresh US sanctions on Russia later dented enthusiasm for the country’s credit.

Investors backed the return of the Balearic Islands to the bond markets on Tuesday with the Spanish region selling its biggest ever single tranche bond. It was able to attract huge demand despite the threat of a snap general election in Spain — a prospect that looked increasingly likely as the week neared its end.

UBS is re-balancing its corporate finance business to end its reliance on its Financial Institutions Group with impressive results, writes David Rothnie.

Two Nordic telecoms companies sold euro corporate bonds this week after both spending nearly two years on the sidelines. Both employed no-grow strategies, and Swedish company Telia sold the longest maturity corporate bond deal of 2019 so far.

Mitsubishi UFJ Trust has launched a £371m block trade to sell its remaining stake in UK financial services firm Standard Life Aberdeen, with the deal covered in under half an hour.

Earnings growth in Europe appears to be slowing after a number of corporates missed estimates as they reported their latest numbers — increasing the chances that issuers will need to turn to equity markets to raise primary capital.

Troubled Italian construction company Astaldi announced on Thursday that it had an offer from rival firm Salini Impregilo to inject €225m of new capital, take over control of the firm, and convert unsecured creditors, including high yield bondholders, into shareholders of the group.

Record breaking Italian football club Juventus made its debut in the corporate bond market on Wednesday. It used the Agnelli family’s involvement in the ownership and running of the club for nearly a century to market the bond, but Italian football clubs do not have a great financial track record, writes Nigel Owen.

Investors have given a rapturous reception for companies raising equity capital to undertake mergers and acquisitions, given the quiet elsewhere in ECM.

Commerzbank has faced some resistance from staff over moves from the UK to continental Europe in preparation for Brexit, although the bank says those who have moved have no regrets. Meanwhile, margin pressure has been weighing on the bank’s corporate clients division, but there were positive signs in its financial institutions business last quarter.

KfW made a strong return to the Canadian dollar market on Thursday after 3.5 years away from the currency, as it tightened pricing on its comeback deal. The German agency came alongside a green bond in the currency from a Canadian province.

The European Central Bank’s liquidity stress test requires banks to report the maximum volume of covered bonds they could issue. This sends the wrong message to issuers who will think it is alright to max out on covered bond issuance, even though it reduces the overcollateralisation (OC) that is there to protect investors.