Europe

The European Banking Authority has spelled out its thoughts about the worth of creating a market for European Structured Notes (ESNs), a covered bond-like dual-recourse instrument backed by a broader range of assets than legislative covered bonds ahead of a public hearing on the potential asset class next week.

Novo Banco is looking to issue a tier two bond, as it part of an agreement reached when it was acquired by US private equity firm Lone Star last year. But under that agreement the Portuguese Resolution Fund is obliged to step in if the bank cannot place €400m of notes privately.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark as of Thursday's close. The source for secondary trading levels is Interactive Data.

Unipol Group, the Italian financial services company, conducted a rare reverse accelerated bookbuild on Thursday night, to buy a 3.25% stake in BPER Banca for €73.8m, only six weeks after saying it would not increase its stake.

Quilter, Old Mutual’s UK asset management subsidiary, has priced its IPO. The last guidance was that orders below 145p risked missing the deal. At that level, the deal would come two thirds of the way up its original range.

Republika Srpska, an autonomous entity in Bosnia and Herzegovina, was set to issue a five year Eurobond at 4.75% on Friday, but those on the deal were not certain of reaching the maximum €200m size.

A new drive to encourage bondholders to "engage" with issuers — jargon for asking them to improve their behaviour — is set to be started by a well known corporate bond investor who has joined an NGO.

Italy’s bonds suffered another day of rising yields on Thursday after the country’s government appointed Eurosceptics to head financial committees.

The University of Cambridge returned to the sterling corporate bond market nearly six years after its debut corporate bond with the first private sector UK inflation-linked bond referencing the consumer price index rather than the retail price index. On the same day, British Telecom also issued inflation-linked bonds to its own pension fund using CPI rather than RPI. Nigel Owen reports.

Guarantor: Republic of Finland

With much of the great and good of the public sector markets busy at the Euromoney Global Borrowers and Bond Investors Forum in London (see page 6 for full coverage), deals were thin on the ground this week. But one Nordic agency was able to build its largest ever order book in dollars and, with conditions looking strong, both that currency and euros are likely to be packed next week, said bankers.

Telecom Italia became the first Italian corporate to sell a bond deal since the new Italian government was installed but found fates conspired against it as Italian government bonds fell throughout the day.