Europe

The European Parliament’s economic and monetary affairs committee (Econ) has voted on an own-initiative report on covered bond harmonisation and outlined a three tier approach to the asset class. The committee proposing distinguishing between premium covered bonds (PCBs), ordinary covered bonds (OCBs) and European Secured Notes (ESNs). The new categorisations are supposed to prevent regulatory cliff effects.

Shares in Allied Irish Banks rose 5% when they began trading on Friday after an excellent response to its €3bn IPO, in which the leads gave nearly a third or investors zero allocations.

Bank Nederlandse Gemeenten has raised £150m with a tap of a March 2022 line, ahead of more supply in the currency next week, according to a BNG funding official.

The European Central Bank on Friday submitted a recommendation to allow it to regulate “clearing and payment systems”, both within the European Union and in other countries.

Amalgamation of the German covered bond sector looks set to endure as Berlin Hypothekenbank (Berlin Hyp) will potentially subsume Deutsche Hypothkenbank, a subsidiary of NordLB which it is considering selling. In a separate development, the cover pools of Westdeutsche ImmobilienBank (WestImmo) will be fused with those of Aareal Bank.

The final fortnight of June has been seen as the last busy window for new issuance before the summer. This week lived up to its billing with over €11bn-equivalent of new deals priced and syndicate desks see no reason for conditions to change next week.

Austria’s Raiffeisen Bank International (RBI) could give investors their first chance to invest in a new additional tier one (AT1) deal, after two weeks in which the asset class went through its first write-down and coupon suspension.

Most new bond issues in Europe this week have been multi-tranche offerings, with issuers benefitting from investor appetite to buy longer tenors for greater returns. Safran, however, bucked that trend with a pair of short dated floating rate notes.

US vehicle parts manufacturer Federal-Mogul cruised through its second fixed rate deal in the euro high yield market this week.

Turk Eximbank, which wrapped up a €412m refinancing in March, has turned its attention to the Asian loan market for a fresh money €300m borrowing.

The governor of People’s Bank of China says Chinese banks must face international competition, the China Securities Regulatory Commission (CSRC) considers changes in Stock Connect daily trading quotas after MSCI’s A-share inclusion, and the Hong Kong Exchange plans to launch CNH and dollar gold futures on July 10.

International schools operator Nord Anglia has tightened pricing and accelerated the deadline on its $1.22bn-equivalent euro term loan, while up to six leveraged loans are due to close syndication at the end of the week.