Europe

The first German building society is poised to enter the Pfandbrief business, two Canadian banks have substantially increased the size of their covered bond programmes and prospective downgrades of NordLB’s covered bonds may not necessarily lead to a spread widening said analysts at Commerzbank, UniCredit and Citi this week.

Many of the illiquid products on CME Europe will stop trading at the end of this week following CME Group’s decision to close the derivatives exchange.

Counterparties are being offered significantly worse credit terms for euro OTC derivative contracts, according to a survey of 28 banks by the Eurosystem of central banks.

The Social Democratic Party of Croatia filed a motion in parliament on Thursday to depose the minister of finance, Zdravko Marić, alleging a conflict of interest with decisions related to the defaulting food company Agrokor, Croatia's largest private company.

Talks are set to begin in Spain to reform the financing mechanism for the country’s regions, which could lead some to their return to the primary bond market for the first time in years. But as with seemingly everything in bonds this year, politics could yet scupper the efforts, write Craig McGlashan and Victor Jimenez.

Hard on the heels of Unibail-Rodamco’s ground-breaking green loan, believed to be the first large corporate financing to give the borrower a pricing benefit if it hits sustainability targets, Koninklijke Philips, the Dutch health technology group, has signed a similar €1bn loan linked to its sustainability rating, writes Jon Hay.

The stakes have rarely been higher for a French election. When French voters head to the polls on Sunday, it may be to determine the fate of the eurozone.

Uncertainty over upcoming European elections could make short term debt investors “run to the sidelines”, said a commercial paper banker.

US banks stole the show in the FIG market this week after publishing their first quarter results, but European banks could soon return to their domestic currency if the French presidential elections give participants great clarity.

Turkey’s debt markets always seem resilient to political shocks. But rose tinted views of president Recep Erdogan’s referendum victory this week ignore a worrying truth that its vast growth potential lies more than ever in the hands of one man able to squander it.

Investors were hit with a fresh political surprise on Tuesday, as UK prime minister Theresa May announced that the country would hold a snap general election on June 8.

Turkey’s Isbank cut through post-referendum uncertainties to raise up to $750m with a seven year senior note on Thursday.