Europe

The market chaos caused by investor panic over Turkey hit the shares of European companies this week, but the risk of a systemic crisis is low, said analysts.

Ålandsbanken, a small bank headquartered in the Åland Islands, an autonomous region in Finland, is seeking to launch its first public sale of a senior bond as part of a drive towards meeting its minimum requirement for own funds and eligible liabilities (MREL).

The Turkish lira rebounded strongly on Tuesday morning in London while sovereign CDS rallied 40bp — but investors are still calling for more action and concerns remain high that without a big rate rise from the Turkish Central Bank, the selling will shortly resume.

This week's funding scorecard looks at the progress Europe's supranationals and agencies at the mid-point of the third quarter.

A Credit Suisse DCM managing director has quit the bank to join Deloitte.

Even as the market expands, many private debt investors are failing to capitalise on the breadth of the asset class, concludes a report by actuarial firm Willis Towers Watson (WTW).

Italian construction group Astaldi’s bonds have taken a beating on concerns that its exposure to Turkish risk could derail plans for injection of needed capital. For some high yield investors, it also is a reminder of market vulnerabilities ahead.

Government bond markets in the eurozone periphery took another beating on Monday amid political tensions in Italy and Turkey, with spreads over Germany at their widest level in months.

Sterling high yield issuers have printed less than half the volume of bonds they sold during the same period last year, which many attribute to the uncertainties surrounding the UK’s exit from the European Union. But appetite for sterling risk appears resilient for now.

After Fitch upgraded Greece’s country ceiling into investment grade territory last Friday, the covered bond ratings of National Bank of Greece and Alpha Bank should also improve with spreads on Alpha's recent five year having the best potential to tighten.

The currency crisis in Turkey has prompted analysts to hone in on the balance sheets of European banks, as they look for the first signs of an increase in income volatility following the introduction of the new IFRS 9 accounting standard.

Shares in Aryzta, the bakery listed in Ireland and Switzerland, fell as much as 10% on Monday morning after the company said it plans to raise €800m via a rights issue to shore up its balance sheet after a series of profit warnings this year.