Europe

There is little demand for another public sector issue referenced to Sonia, the preferred alternative to sterling Libor, in the wake of the European Investment Bank's successful deal in June, a senior SSA portfolio manager said this week.

Investors see value in bank additional tier one (AT1) bonds, pointing to low coupon cancellation risk and attractive entry points for those approaching a call date.

New US sanctions announcements on Russia, chatter around new IMF financing for Angola and a desperate economic recovery plan in Venezuela are keeping those emerging market portfolio managers still at their desks busy. But low volumes are playing havoc with EM secondary levels as traders embrace the quietest trading week of the summer.

The volume of new equity-linked deals in Europe is down significantly this year compared with the same period in 2017, but market participants hope for a recovery when the ECB starts raising rates.

The UK and Italy are potential flashpoints in a European credit market where political fragmentation is the biggest internal risk, Standard & Poor’s warned on Tuesday. Continued low interest rates will be crucial to companies staying in good financial health.

KommuneKredit hit the screens on Tuesday for a new five year euro benchmark, hoping to emulate the success of the European Stability Mechanism’s deal in the same currency and maturity in July.

International Finance Corporation printed a record size for its seven year on Tuesday, with huge backing from bank treasuries, despite the trade offering no new issue concession.

The Derivatives Service Bureau (DSB) suggested ways to alleviate concerns from stakeholders over pricing and governance on Tuesday when it published the key findings from an industry consultation conducted in July.

The Federal State of Berlin’s new 20 year bond on Tuesday was almost three times oversubscribed, as investors took advantage of the hefty pick up over Bunds.

Turkish president Recep Tayyip Erdoğan has frequently used FX and equity market investors as straw men on which to blame Turkey’s economic woes, rather than his own government’s economic mismanagement, a claim given veracity now by the petulant tweeting of US president Donald Trump.

Future plc, the UK magazine publisher, has raised £105m to finance its acquisition of Purch, the US science and technology magazine publisher, after its three for four rights issue finished 92.2% subscribed on Tuesday.

MegaFon has secured Rb15bn ($222m) in loans from Gazprombank, as Russia’s second largest phone company builds a financial war chest to become the country’s latest company to delist from the London Stock Exchange.