Europe

John Maynard Keynes said we live in a world of irreducible uncertainty, while neoclassical economists assume that perfect information is available and people have rational expectations. The events of the past decade suggest that the former school of thought has more credence, though “freshwater” economists would no doubt disagree.

BBVA and BFCM chose to issue five year debt on Thursday, as vanilla senior debt took precedence over capital and loss-absorbing securities.

Shares in GCP Asset Backed Income Fund, the closed-end investment fund focused on asset-backed loans, fell 0.5% on Thursday after it announced a £100m capital increase to raise funds for future investments.

Municipality Finance raised €1bn on Thursday with a short 10 year bond that was, according to head of funding Joakim Holmström, the agency's top priority for the quarter.

Royal Bank of Canada, Canadian Imperial Bank of Commerce, Commonwealth Bank of Australia and Deutsche Pfandbriefbank tapped the sterling covered bond market this week at cheaper levels than they could have achieved in euros and dollars.

A pair of public sector borrowers switched up their approaches in dollars on Thursday, with the European Investment Bank taking the rare move of revising pricing and Caisse d’Amortissement de la Dette Sociale bringing a trade earlier than normal.

With yields set to rise and spreads likely to widen, covered bond issuers should waste no time in getting ahead on 2017’s funding plans and doing the more difficult trades first.

Autoroutes du Sud de la France, the French toll road operator, tested the investment grade euro corporate bond market’s taste for tenor on Thursday with a 10 year trade.

Searing conditions in the sterling market could lead to a record opening week of SSA issuance in the currency as a pair of issuers lined up deals for Friday — despite this only being a four day week.

French medicine manufacturer Unither Pharmaceuticals is set to kick off the primary market in European leveraged finance for 2017, setting a bank meeting for Tuesday in Paris for €260m of loans.

Despite having bagged some of the biggest returns in the capital markets last year, European high yield fund managers are entering 2017 with unease as they survey central bank activity and potential political mishaps.

Commonwealth Bank of Australia swept up remaining demand in the now saturated five year sterling covered bond market on Thursday, while Deutsche Pfandbriefbank (PBB) got a fair reception for the first three year floating rate covered bond of the year.