Europe

KfW received solid demand for its €1bn global June 2020 benchmark tap on Tuesday, as investors lapped up the rising swap spreads caused by political tensions in Italy and economic crisis Turkey, and looked for safe assets.

Moody’s downgraded Banca Carige’s residential mortgage backed covered bonds this week, but kept them in investment grade territory. Spreads barely moved in the aftermath, suggesting investors have already sold their exposure.

The summer break in European corporate bond markets has shortened in recent years to as little as two weeks in August, but investors know that the dollar market is always an option.

Good old fashioned contagion has led the worsening situation in the Turkish market battering the rest of emerging markets this week as a plummeting lira and spiking Turkish CDS levels spooked buyers across CEEMEA and Latin America. Even western Europe has been feeling the heat as investors start to fret about Turkish exposure.

Iron ore firm Ferrexpo has more than doubled the size of its revolving pre export finance facility to $400m and has extended the maturity by an extra year, but lenders say Ukraine’s loan market remains only partially open.

Recent cash flows from funds buying European corporate bonds and loans with speculative grade ratings have increased with support from US investors, as markets get ready for the second half of the year.

Asia’s offshore bond market ran to a near stand-still this week, with just one issuer selling a dollar bond. While the typical summer lull is to blame for at least some of the quiet, bankers were divided on whether the crisis in Turkey has made things worse for Asian issuers.

Bank Nederlandse Gemeenten has increased its total funding requirement for the year as it prepares for the second half of 2018.

Markets don’t like governments engaging in unnecessary economic self-harm, and after numerous warnings and cautions on its unsustainable economic policies, investors are now abandoning Turkey —Brexit Britain should beware.

Gianluca Spinetti, an associate director working in FIG and corporate DCM origination, has left HSBC.

Austria’s Ministry of Finance will finally set out draft proposals to harmonise the country’s three covered bond legal frameworks early in 2019 after years of deliberations. And, with the introduction of new measures that bring the unified law into line with best practice, rating upgrades are likely.

Restricted tier one bonds sold by Vivat, the Dutch insurance company, were zipping tighter in the secondary market on Tuesday, following reports that its Chinese owner Anbang Insurance Group was looking to open a sales process for the firm.