Europe

Investors are confident Italian spreads will stabilise after the sovereign widened versus Germany over fears of a potential second general election of the year. There was some evidence of that on Wednesday morning as the country’s yields reversed some of their losses.

House of Fraser, the department store chain, has joined the trail of UK high yield retailers that have turned to company voluntary arrangements (CVAs) to deal with financial difficulties. But this time, the borrower has also found a new owner, a development its 11% shareholder Sports Direct is threatening to block in court.

The Dutch State Treasury Agency will clear its interest rate swaps at the clearing arm of German derivatives bourse Eurex, it was revealed on Tuesday.

Invesco has hired a senior portfolio manager for its London fixed income team from Schroders Investment Management.

The IPOs of two Turkish retailers, Beymen and DeFacto, were cancelled at the end of last week, after failing to attract enough demand to cover the shares on offer. A third IPO, Şok Marketler, was extended to Wednesday May 9. All three were seeking to list in Istanbul.

With the deal flow in the Schuldschein market turning to more of a deal drip, participants are taking the spare time to clean up the shop floor.

Hedge fund Caius Capital has written to the European Banking Authority claiming that a legacy equity-linked instrument issued by UniCredit counts incorrectly as regulatory capital. The fund believes this makes the bank’s ordinary shares ineligible as capital too.

After four years away from the high yield market, UK North Sea operator Ithaca Energy was back with a bond refinancing deal this week, as European oil and gas issuance runs well ahead of last year’s pace.

Covered bond deals issued on Tuesday by Deutsche Bank and Hypo Oberösterreich offered concessions of less than 2bp, illustrating that spreads have stabilised. With supply likely to remain low over the next few weeks, the more supportive backdrop should persist.

Sydbank is preparing to sell its first additional tier one bond in the euro market, complementing plans to optimise its capital structure via share buy-backs.

The US corporate bond market has enjoyed strong new issuance volumes in the last two weeks, while the European market has been much quieter. But in emerging from two weeks shortened by public holidays, Europe is preparing to close the gap.

BondMarker voters scored three deals last week, including the European Financial Stability Facility’s last helping of funding for the second quarter and an arbitrage style trade by KfW. Read on to see how the deals were received.