Europe
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The European syndicated loan market is facing an unprecedented structural challenges this year, leaving market participants unsure what the usually steady corner of the capital markets might look like by Christmas, writes Michael Turner. -
Deutsche Bank found fleeting funding consolation with a tightly priced Pfandbrief this week but, with a considerable funding requirement left to fill, the German bank is braced for a return to senior and subordinated markets where support is likely to be more flighty. Bill Thornhill reports.
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The Autonomous Community of Madrid this week made a triumphant second visit to the socially responsible investment (SRI) market as it printed a deal double the size of its debut last year. Further issuance from the borrower — in conventional and SRI format — is likely to come soon, although in private placement (PP) format. But there may be further SRI issuance from some of Madrid’s Spanish peers.
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The State of North Rhine-Westphalia showed that the euro long end is open for core SSAs despite wider market volatility on Thursday, but there was a more testing time for Greece in secondary.
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The European Securities and Markets Authority’s plan to take over approving wholesale debt and asset backed securities prospectuses has flummoxed market participants, who say ESMA has no plan to make the new system work — raising fears that European debt markets will be gummed up by a cumbersome approval process.
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A report published on Friday and commissioned by the Capital Markets Union (CMU) locates countries that are well placed to match the domestic success of the French euro private placement (PP) and German Schuldschein instruments.
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A jump in US Treasury yields following a higher than expected US inflation print could boost long end dollar supply from SSAs said bankers, although investors might be keen for concerns over inflation to die down first. Meanwhile, issuers have been focusing on short dated arbitrage style trades with benchmark issuance limited this week — and likely next week — due to the Chinese New Year holidays.
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Liquidity in German senior bonds is set to be hit by new rules preventing the use of the bonds as collateral when borrowing from the European Central Bank (ECB).
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National Australia Bank (NAB) and Société Générale issued Swiss franc bonds on Wednesday with tight pricing, in a sign that the market is luring financial borrowers to print opportunistically.
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Implied equity volatility on US stocks, measured by the CBOE’s VIX index, showed signs of cooling off on Wednesday and Thursday, after it dropped from 27 on Monday and Tuesday to 19.7 on Thursday.
