Europe

Rating: Baa2/BBB

The launch of the Allied Irish Bank’s (AIB) IPO by the Irish government should be welcomed as an important landmark in the republic’s astonishing recovery since it emerged from its bailout in 2013.

Corporate bond bankers have been left thunderstruck after the market closed its second busiest month ever in euro and sterling with more than a huge €48bn printed in May, and investors still have cash waiting on the sidelines for more issuance in the coming month.

The European Securities and Markets Authority (ESMA) has warned regional regulators against a potential race to the bottom to attract UK business in the aftermath of the Brexit vote, writes Costas Mourselas.

UniCredit mandated banks to arrange its return to the dollar market in tier two this week, as the Italian bank considers a global approach to tackling its regulatory capital requirements.

The European Commission and the Italian government have reached an agreement in principle to grant Monte dei Paschi di Siena (MPS) a “precautionary recapitalisation”, clearing the way for the Italian government to inject public funds into the troubled Italian bank.

While SSA syndicate bankers maintain that conditions in euros are still good, there was barely any issuance this week as attention turned to next week’s ECB meeting and a potential snap election looming in Italy. Meanwhile, the European Stability Mechanism and European Financial Stability Facility revamped their funding programmes in light of better than expected funding opportunities in the past few months.

Rating: Aaa/AAA

Oil and gas company MOL became the first Hungarian issuer in the Schuldschein market this week. And, as the market expands further from Germany, there is no sign that credit quality will become less central to an issuer’s success.

Sub-benchmark transactions made up a chunk of Wednesday’s busy euro primary market, with Metso Corp and Neste bringing bonds for less than €500m.

The blossoming market for socially responsible investments focussing on social problems, rather than environmental concerns, sprouted a new shoot this week. Nederlandse Waterschapsbank’s affordable housing bond could be the first of many of its type and may open the door for housing associations to sell social bonds.

The UK Debt Management Office (DMO) is keeping its options open on a planned syndication for September, as Gilt yields fell following polls showing the opposition Labour Party was gaining ground on the ruling Conservatives ahead of next week’s UK general election.