Europe

Consumer goods company Unilever’s newest bonds recovered almost all the losses sustained after Kraft Heinz made — and then promptly withdrew — a $143bn takeover bid for the company earlier this week.

Investors piled into a €1bn dual tranche transaction from telecoms company Ericsson on Monday even after the issuer dragged pricing in by around 35bp, in an execution that bankers say highlights how tough it has become for syndicates to derive fair value.

Technical factors have strongly supported the Obbligazioni Bancarie Garantite (OBG) market, but the resignation of former Italian prime minister, Matteo Renzi, from leadership of the ruling Democratic Party (PD) may hurt the market over the next few months.

Bond spreads now only provide marginal compensation for political risk to investors, JP Morgan said on Monday, with the largest ever outflow from European investment grade retail funds last week.

Investors snapped up a tightly priced tier two from Norway’s DNB Bank on Monday, spying a rare chance to pick up good returns from a Scandinavian credit.

Last year was a record in terms of number of downgrades of emerging market sovereigns, with another four added this year — Turkey, Mozambique, El Salvador and Costa Rica. But Société Générale on Friday became the latest firm to criticise the ratings agencies for their pessimism.

Svenska Handelsbanken built a solid order book for a tightly priced senior bond on Monday, suggesting there is still appetite for the asset class as spreads tighter.

Polish energy provider Energa SA is meeting investors this week for its first Polish non-financial corporate bond since June last year, which will also be the first corporate deal from anywhere in Central and Eastern Europe this year.

Deutsche Bank was looking to take advantage of tightening bond spreads as it tapped an outstanding senior bond on Monday, following closely behind a €500m tap of one of its floating rate notes last week.

French pharmaceuticals firm Ethypharm has released price guidance on its £152m six year cov-lite term loan ‘B’, backing its acquisition of UK-based Martindale Pharma.

Landesbank Baden-Württemberg has priced the tightest covered bond of the year and was able to tighten pricing to a greater extent than any other German issuer this year.

Investors can now hedge their Chinese portfolio during European trading hours following the launch of CSI300 index futures contracts on Eurex, the continent’s largest derivatives exchange.