Europe

The Federation of Russia is returning to the bond markets for the first time since a set of US sanctions in April sent the country’s bond trading into a tailspin. But despite books for the bond already being in excess of €1bn, several bankers away from the deal are describing it as a “political statement” rather than a well thought out trade, and are heavily criticising the timing and choice of euros for the note.

HSBC Holdings took €2.25bn out of the euro market on Tuesday, raising funding to meet its total loss-absorbing capacity (TLAC) target. The bank recently sold bonds aligned with the UN’s Sustainable Development Goals, but switched to its green framework for one tranche in this week’s trade.

National Australia Bank (NAB) was looking for execution certainty when heading to the dollar market to sell a pair of senior unsecured and covered bonds on Monday. But with credit conditions improving on Tuesday, Westpac shaved a few basis points off the cost of funding compared with its peer by opting for euros in covered and senior formats.

UK equity capital markets are feeling the pain from Brexit, with volumes from the country this autumn at one of the lowest levels in recent history.

On Monday, Austrian oil and gas company OMV’s first senior corporate bonds of 2018 attracted €3.9bn of total demand for a pair of €500m notes with five year and 10 year tenors. The demand allowed the issuer to tighten the spread by more than 20bp on the longer tranche.

Nederlandse Waterschapsbank recorded a healthy average of 7.1 on BondMarker with its only dollar benchmark of the year.

Bharti Airtel, the Indian telecommunications conglomerate, has named an eight bank syndicate for the 2019 flotation of its Africa business, Airtel Africa.

As UK prime minister Theresa May looks to sell her Brexit deal to a disgruntled parliament, banks have been suggesting different options structures to clients to net positive returns from the resulting turbulence.

Top rated syndicated loan borrowers are pushing fundraising plans back to 2019 after last week saw sharp market wobbles on the back of a shock plunge in oil prices and no let-up in the arguments over Brexit.

Neither ABN Amro nor Raiffeisen Bank International were hanging around after a brighter start for financial markets on Monday, with the duo using the opportunity to open books on new preferred senior transactions.

African Development Bank and Nederlandse Waterschapsbank hit screens on Monday for SRI bonds. Meanwhile, CPPIB Capital will aim to issue its first green bond in euros early next year, following the conclusion of a pan-European roadshow last month.

The secondary market for covered bonds remains weak and, according to one trader, conditions are “not far from disorderly”. All jurisdictions and tenors are under pressure as borrowers have “no incentive to defer planned new issues”, said analysts at DZ Bank.