Europe

UK corporates are preparing for the large UK banks to bring down their ring-fences, a move that could shake up the banking landscape and push more corporates to sign credit support annexes with their banks.

Pricing in Europe's equity block trade market has tightened markedly, following large inflows of funds into European equities in the weeks since the first round of the French election, as investors queue up for more exposure to a continent primed for growth and now largely free of political risk, writes Aidan Gregory.

News that the International Monetary Fund and eurozone finance ministers were unable to agree on Greek debt relief has sent yields on the beleaguered sovereign’s 10 year debt rocketing upwards.

Aluminium producer Rusal secured a $1.7bn pre-export finance facility on Wednesday, the fourth PXF from Russia signed this month, as banks favour the stability of this structure in the current political climate.

Ineos is likely to use some bank debt for its $1bn acquisition of Dong Energy’s upstream North Sea oil and gas business, and is also engaging in a $250m vendor loan note provided by Dong.

Higher beta corporate borrowers have shone this week to print eight bonds totalling €5bn, as investors were happy to fill their boots on cheaper paper after weeks of jumbo multi-tranche double-A rated bond issuance.

Amended Slovakian covered bond legislation, set to come into effect in January 2018, will lay the foundation for a robust internationally focused market leading to greater volume, delegates at the CEE Covered Bond Forum in London heard this week.

Russia is on a roll with its fourth senior secured pre-export finance facility signed this month, the latest one being a $1.7bn deal for aluminium producer Rusal.

Hensoldt, the KKR-owned defence electronics firm, held a lender call on Wednesday morning for a €170m incremental term loan, following its acquisition of avionics business EuroAvionics. The deal comes as some investors are concerned the leveraged loan market could return to the extreme conditions of earlier in the year.

Corporate bond issuers have found a warm welcome in what is likely to be the last day for new issuance in Europe this week, before the Ascension Day holiday temporarily shutters supply.

The Flemish Community’s second ever outing in the public debt market raised €1.25bn over two tranches, pulling in large books and setting the final spread 4bp inside guidance on one of the legs.

Caisse des Dépôts et Consignations looks likely to be the latest public sector borrower to return to the sterling market after a long absence, after it hired banks to hold investor meetings next week.