Europe

Market discussions over loose default protection covenants have grown louder, but not always wiser, said Debt Explained, the leveraged finance analysis firm, as it launched a covenant scoring product this week. But some investors remain sceptical of such services.

Multi-tranche and green bond issuance returned to the investment grade corporate bond market on Tuesday, leaving just the hybrid asset class untouched in 2018. That didn’t last long, as Engie and Aroundtown launched new hybrid deals on Wednesday morning, one of which set new lows for coupons and spreads.

Macedonia on Thursday set final terms for a €500m seven year bond at 3%, the tight end of price guidance at 3.125% area, with books over €3.5bn.

Several big name investors this week called the start of a bond bear market after a back-up in 10 year US Treasury yields but there was little sign of reticence from the emerging markets buy-side, with three sovereigns pulling in jumbo order books.

US private equity firm Lone Star sold a 9.9m block of shares in Spanish real estate developer Neinor Homes after the market closed of Wednesday, via an accelerated bookbuild that was “substantially “oversubscribed,” according to a banker involved.

The MiFID II requirement for banks to justify allocation decisions on equity capital markets (ECM) deals could encourage investors to make reverse enquiries to lead managers, write Sam Kerr and Aidan Gregory.

Public sector issuers rounded out a superlative week for dollars with sparkling results across the curve on Thursday. Bankers are confident that issuers wishing to print in the coming weeks should find that investor demand outweighs any of the political concerns that brought volatility to rates over the last few days.

Euro private placement issuance has dwindled in the past few years as larger companies have found cheaper funding elsewhere. But a flurry of chunky transactions late in 2017, including two from prestigious family holding companies, has led some to dream big for the year ahead.

Telefonica Deutschland launched a €200m Schuldschein on Thursday, which included a €50m one year tranche that was placed using blockchain technology.

Bosal, the Dutch manufacturer of industrial equipment, is selling its tow bar division to private equity firm TowerBrook. EQT has provided the financing for the acquisition.

UK property website operator Zoopla announced the first deal of 2018 in the European high yield market this week, a sub-benchmark sized bond in sterling.

Westpac attracted substantial demand for its five year sterling floating rate deal on Thursday, with considerable investor liquidity ensuring a particularly attractive cost of funding.