Europe

European authorities tested the bank recovery and resolution directive (BRRD) for the first time this week, placing Spain’s Banco Popular into resolution and approving its sale to Santander. The regulatory process, in which subordinated debt was wiped out, has far ranging implications for all market participants working on financial debt, write Tyler Davies, Jasper Cox and Aidan Gregory.

Clearing experts vigorously debated the topic of central counterparty (CCP) recovery and resolution this week at the Futures Industry Association's International Derivatives Expo (IDX).

Public sector borrowers are considering sterling deals next week — but any issuance will hinge on the result of the UK’s general election on Thursday. The vote will also have a large bearing on Gilt yields, said analysts.

A trio of events on Thursday put the skids on the corporate bond primary market, as the UK headed to the polls on the same day as the European Central Bank met and US president Donald Trump faced his toughest day in Washington yet.

US telecoms company AT&T brought a €7bn multi-tranche trade on Wednesday that offered juicy premiums as the company began filling the $40bn cash pool it needs to buy Time Warner.

NRW.Bank made a big noise in a quiet dollar market this week as it printed the joint largest floating rate note from a European supranational or agency this year. Other issuers might be encouraged to follow with similar deals next week, said bankers, although a US Federal Reserve meeting on June 14 — where a target rate rise is widely expected — will bisect the window.

Fresenius Medical Care (FMC) — the dialysis specialist 30% owned by healthcare group Fresenius — is looking to refinance loan facilities, a month after Moody’s upgraded the firm to investment grade

German medical firm B. Braun sold what some are calling the tightest six year loan in Schuldschein history this week, even as it more than doubled the €150m initial target. However, some Schuldschein bankers believe German issuers have reached the pricing floor.

The contingent convertible (CoCo) bank capital market received all the plaudits on Wednesday, when Banco Popular Español was forced into a “rescue” by Santander.

Credit Suisse has finished its second rights issue in two years, having won a high take-up from its shareholders.

A triumvirate of events on Thursday put the skids on the corporate bond primary market, as the UK headed to the polls on the same day as the European Central Bank met and US president Donald Trump faced testimony from the FBI director he fired.

Many equity market participants thought the wave of big European bank recapitalisations was beginning to wind down, until Santander surprised the market on Wednesday by announcing a €7bn rights issue to recapitalise Banco Popular, its failed domestic rival, after agreeing with European regulators to buy the bank for €1.