Europe
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The week began with that rarest of things in recent times, a welcoming political backdrop. It was marred, however, by monetary policy meetings from the two most important central banks in the world. While the US Federal Reserve’s second rate hike of the year was a foregone conclusion, it caused the dollar curve to flatten still further, making the euro market even more fertile funding territory than it has been for SSAs. But even so, euros had its own struggles this week, facing what one head of SSA syndicate called “one of the most important and unpredictable European Central Bank meetings for a long time”. Lewis McLellan reports. -
SSA borrowers have long been used to having it their way amid the exceptional monetary easing meted out by central banks since the global financial crisis. But this week could be the moment things started swinging back in favour of investors.
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The planned takeover of Innogy by E.On and asset swap with RWE creates an unusual, if not unprecedented, situation in the green bond market. Innogy’s €850m green bond, issued last year, will become a liability of E.On, but the windfarm assets to which the proceeds have been allocated will end up with RWE.
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Public sector borrowers looking for dollar funding are likely to have to go even shorter than they have been used to after this week’s Federal Open Market Committee meeting, said SSA bankers.
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French insurer CNP Assurances said this week that it would issue its first ever restricted tier one bond, just days after Vivat paid a hefty premium to bring its own debut offering in the format.
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DNB Boligkreditt showed this week that borrowers have a very good incentive to consider issuing green covered bonds, especially now that the European Central Bank has signalled its intention to reduce net buying of assets under the Covered Bond Purchase Programme (CBPP3) to zero by December.
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With syndicated loan business thin on the ground in EMEA this year, E.On had no trouble achieving a 100% hit rate among its relationship banks, when syndicating the €5bn loan financing for its €20.42bn takeover of Innogy.
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KommuneKredit will hit the road next week to talk up a new green bond, while a fellow Nordic issuer is looking to enter the social bond market — although not for some time yet.
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Turkey’s Garanti bank has sold its first ever social bond, a $75m private placement. The International Finance Corporation purchased the bond as part of its Banking on Women Programme.
