Europe

Kommunalbanken built a doubly subscribed book on Tuesday for a long three year dollar deal that bankers said should give confidence to the market after a similar trade from KommuneKredit two weeks ago fell short of full subscription.

The IPO of ALD, the car leasing division of Société Générale, is covered at its maximum size including the greenshoe, ahead of the end of the bookbuild on Thursday.

Although sentiment around the euro corporate bond market is favourable, following Emmanuel Macron’s party’s decisive results in French parliamentary elections on Sunday, only one new issue and one tap hit investors’ screens on Tuesday.

On Monday night, NLFI, the organisation that manages the investments of the Netherlands, completed the sale of another chunk of its stake in ASR Nederland, the insurer nationalised during the financial crisis.

Germany's Klöckner Pentaplast’s merger with UK competitor Linpac will create a global player in the packaging sector, the firm said on Tuesday, with an Ebitda of over €300m. The debt backing the merger will bring leverage at the firm to over eight times Ebitda, however, according to S&P, and one investor said he was concerned the deal could follow the market trend in becoming too aggressive.

Deutsche Hypothekenbank has mandated leads for its first deal of the year, weeks after its owner NordLB said it was considering a sale of the bank. The high quality cover pool and choice of German law as the governing code will stand the deal in good stead, but uncertainty over borrower's future ownership could complicate matters.

Romania-focussed Globalworth Real Estate Investments drew support from a variety of investors for its debut bond, which included a large cornerstone order from a financial institution, to price a €550m deal at 3% on Monday.

SEB issued a tightly priced €1bn seven year covered bond on Tuesday, but the slim scale of oversubscription reflected investors’ resistance in the fatigued market.

Russian supply is trickling through after Tinkoff Bank placed the sole deal from the region last week with Vimpelcom taking books on Tuesday of over $3bn at for a dual tranche offering, and Eurochem back for a another bite of the capital markets cash.

Lloyds Bank has launched cash tender offers for about £6bn of dollar, euro and sterling senior bonds, as the UK financial institution looks to shrink the pool of outstanding notes issued from its operating company (opco).

The difference in trading levels between well capitalised and thinly capitalised banks could increase following Banco Popular’s resolution, making it more difficult for some banks to access the market for subordinated debt.

The euro corporate bond market started the week on the front foot after French president Emmanuel Macron’s party won the first round of parliamentary elections on Sunday and set up a likely landslide win in the National Assembly vote on June 18.