Europe

The UK’s JD Wetherspoon has increased its sterling revolving credit facility to £875m, as the pub chain with heavily pro-Brexit management announced significantly higher costs in its latest trading update.

Metro Bank’s update to the market on Wednesday has led to speculation it will need to raise capital once more. It revealed slowing loan and deposit growth, weaker than expected profits, and a greater than expected rise in risk-weighted assets chewing up its capital ratio. The update came at a time when UK banks are pessimistic about raising capital.

Banca Monte Dei Paschi di Siena (MPS) achieved a strong result for its first Obbligazioni Bancarie Garantite (OBG) since 2015, sending a strong signal to investors, and particularly those of its struggling subordinated bonds.

Emerging market investors are enjoying an excellent start to the year in the secondary market, but primary supply has not maintained its strong start to the year. Bankers and investors are confident that issuers will get moving soon though.

Banca Carige is set to raise €2bn of new funding through the sale of two government-backed senior bonds, after the Italian finance ministry gave it the go-ahead this week.

January has proven to be a good month for equity investors as indices have experienced moderate growth after a devastating end to 2018, but investors are not betting too heavily on a prolonged rally and as such are holding back.

Corporate bond spreads widened in the fourth quarter of 2018, adding to the overall negative returns the asset class provided investors with over the year. However, with spreads now back at levels not seen since 2016, investors are considering increasing their allocations to the sector once more.

Citigroup opted to use the euro market on Tuesday for its first ever green bond, tapping into what looks to be strong investor demand for three year paper.

Swiss speciality chemicals company Sika attracted more than Sfr6bn of demand on Tuesday evening for a mandatory convertible bond issue to finance its Sfr2.5bn acquisition of Parex, the French building materials company, from CVC Capital Partners.

Five high yield bond issues were launched in the US on Tuesday, and at least a couple more are expected on Wednesday and Thursday - fruit of the sharp turnround in sentiment in the past fortnight. This is lifting the spirits of bankers in London, who are finding it very hard to encourage issuers into the market.

Two SSA borrowers will go head to head in the dollar market on Wednesday, bringing five year benchmarks with only 1bp difference in initial price thoughts.

Spain came to market on Tuesday, printing its traditional January 10 year euro benchmark and receiving an overwhelming level of demand.