Europe

Covered bond deals issued in the five to seven year part of the curve on Wednesday by ING Belgium, Berlin Hyp (BHH) and The Fédération des caisses Desjardins du Québec (FCDQ) were all well received and stood in stark contrast to a 10 year from Nationwide.

On Wednesday, US electrical appliance manufacturer Whirlpool became the second investment grade corporate borrower to pull a deal in a week. German energy company Innogy and Whirlpool both found the corporate bond market tough going on Wednesday, despite having employed two-day marketing strategies. Whirlpool, however, took the hardest hit.

Antoine Porcheret, a senior equity derivatives strategist at BNP Paribas in London, has left the French bank.

As investors take shelter from the incoming Italian administration by selling the capital instruments of the country’s banks, one security outperformed this week. UniCredit’s convertible and subordinated hybrid equity-linked securities (Cashes) traded up at the beginning of the week as investors assess how likely it is that the bank will have to remove the instrument from its capital stack.

Europe’s top ECM syndicate bankers are becoming a little disheartened about the IPO market, having had very little to celebrate since Easter.

The statement that value is what someone is willing to pay has proven true in the corporate bond market in the last week. Large multi-tranche deals paid lower new issue premiums than smaller deals that came later in the week, while one deal failed to find that value point altogether. And then a €2.9bn four-tranche jumbo deal attracted a €4.35bn book, albeit with healthy premiums on all tranches.

Conviction levels are low among emerging market investors with many waiting on the sidelines this week as geopolitical risk and local currency weakness persist in wreaking havoc on EM bonds.

Denmark’s Sydbank was able to tighten pricing by about 25bp during the sale of its first additional tier one on Wednesday, despite surfacing in very poor market conditions.

Republic of Latvia was on track to print its new dual tranche euro-offering on Wednesday, though soft markets meant that it was offering a 7bp-10bp new issue concession at the final spread.

Bank Gospodarstwa Krajowego (BGK), Poland's state development bank, has set the reoffer spreads for its seven and 12 year euro bonds. Combined books are in excess of €800m, evenly split between the tranches.

Some investors are optimistic that Italy’s borrowing costs can recover following a rapid rise over the last few days as the spending plans of its likely new government came to light. But they also warned that the picture is rapidly changing — as evidenced by the apparent push-back this week by the Italian president against the proposed candidate for prime minister.

Shares in UK games developer team Team17 rose by as much as 36% on Wednesday morning after the company began trading on London’s Alternative Investment Market (AIM) following the completion of its £107m IPO.