Europe

Equity capital markets in Emea reopened after the holidays this week, with details of the first new capital increases in France and the UK being made public.

Covered bond issuers from Europe’s core accessed the market across a range of intermediate tenors this week with LBBW, Compagnie de Financement Foncier (CFF) and Helaba issuing some of their largest deals in years.

The equity-neutral convertible bond structure that faded from the market in the second half of 2016 made a strong comeback on Thursday, when French tyre maker Michelin launched a $500m deal that won eager demand and was priced at the best end of terms for the issuer, writes Jon Hay.

Four sovereign, supranational and agency borrowers came to market for euros in the opening week of 2017, showcasing the market’s depth and flexibility. But the torrent of supply has meant that issuers haven’t had it all their own way.

European financials have found every reason to get into the dollar market early in 2017, leading to a fireworks display of total loss-absorbing capacity (TLAC) senior deals this week. Though market conditions could not have been better to receive the banks, many will have wanted to squirrel away quantities of funding and capital for what could be another troublesome year in the capital markets.

The equity-neutral convertible bond structure that faded from the market in the second half of 2016 made a strong comeback today, when Michelin, the French tyre maker, launched a $500m deal that won eager demand and was priced at the best end of terms for the issuer.

A strong start to the year for leveraged buyout deals has helped stoke banker confidence that 2017 could be another solid year for event-driven loans following healthy activity in 2016, even as refinancing business bottomed out.

DNB Boligkreditt got the Nordic covered bond market off to a blistering start on Wednesday with a €2bn five year deal that leads were able to tighten by 5bp from initial guidance.

Turkish borrowers face a tough year as security concerns about the country threaten access to a funding market that is already expected to suffer volatility. But bankers say it is business as usual in Turkey, and investors agree that Turkish spreads are still an attractive prospect.

Coventry Building Society received a strong reception for the first euro-denominated covered bond from a UK issuer since the UK Brexit referendum. Despite cheaper funding alternatives, the deal demonstrated Coventry’s strategic commitment to the euro market.

Four covered bonds issuers raised almost €6bn between them at the long end of the curve this week, suggesting borrowers are prioritising tougher, longer duration deals. And while conditions permit some are issuing in the largest size possible.

Major derivatives exchanges have released figures showing growth over 2016 and in December, with big gains reported in some product lines.