Europe

The GC BondMarker voters have delivered their verdict on last week's benchmarks. Voters evaluated a dual tranche from the European Financial Stability Facility (EFSF) and dollar trades from the Province of Alberta, Sweden and Land NRW.

Greece’s return to the capital markets this week was cause for celebration, but the irony is that five years after committing to do "whatever it takes" the European Central Bank is now poised to normalise monetary policy — which means investors must start pricing for risk.

Autumn should provide answers to whether or not changes in the European Central Bank's monetary policy will cause spreads to widen, and whether more banks will start to use the senior non-preferred instrument.

Recent strong demand from US investors for lower rated high yield bonds in euros has helped stimulate issuance from the triple-C rated companies. But US fund managers are not buying indiscriminately and bankers say they were instrumental in forcing Bain Capital to change an aggressive covenant on a deal placed this week. Victor Jimenez reports.

Liability management exercises are becoming de rigeur among Europe's capital-strapped banks, as market participants face up to a world in which regulators have the power to step in early and impose heavy losses on bondholders. Tyler Davies reports.

Rating: Caa2/B-/CCC

Guarantor: Financial Market Stabilisation Fund of the Federal Republic of Germany

Greece’s comeback bond this week should build on its already strong secondary performance, said SSA bankers, paving the way for the sovereign to bring more deals before its scheduled bail-out exit in August 2018. Bankers were quick to point out that while the deal resembled its last comeback trade in April 2014, much has changed since — including its cost of borrowing.

FMS Wertmanagement was this week the latest public sector issuer to enjoy enviable conditions in the dollar market, and after a US Federal Reserve meeting this week passed without any major surprises more borrowers are rumoured to be looking at trades for next week.

Nederlandse Waterschapsbank this week became the first European SSA to print in the Swiss franc market since 2015, followed by Municipality Finance two days later. Favourable moves in the euro/Swiss franc basis, alongside rising Swiss interest rates, opened a window for old borrowers to return.

Deutsche Börse reported second-quarter earnings on Wednesday that showed increased trading of interest rate derivatives offset lower activity in equity and index derivatives.

Promsvyazbank (PSB) priced an inaugural additional tier one (AT1) dollar deal at 8.75% on Wednesday morning after attracting more than $1.1bn of orders.