Europe

Spain’s 10 year bonds on Monday reversed all their Brexit driven losses, after the country’s voters showed a clear preference for pro-European Union parties at a general election on Sunday.

Bank investors of Norwegian and Swedish covered bonds will be obliged to hold more capital against their investments from next week. Though this is likely to have implications for a considerable number of noteholders, the absolute change is small and is unlikely to affect demand, said analysts at Danske Bank research.

Cape, the UK industrial services company, has refinanced a £295m revolving credit facility, adding two banks to the syndicate and extending the maturity by two years.

Loans bankers are holding out for details of the divorce agreement between the UK and the EU to surface before assessing the full impact of Brexit on their market. But in the short term, they expect a hit to already low volumes.

The European Commission is expected to include extra funding for the European Banking Authority in an upcoming budget proposal to help the regulator pay for an expected relocation to the continent.

UK packaging firm Linpac is expected to launch €175m of loans in the coming weeks, a deal it has been marketing since May. The deal could be the first for a UK borrower since the country voted to leave the European Union in a referendum last Friday.

Market participants struggled to assess the fallout from the UK's EU membership referendum on Monday, with fears over rates, politics and portfolios all heaping further pressure on subordinated bank debt.

Emerging market bankers said on Monday that they are optimistic that developing market credit will hold firm as Britain forges ahead into the “world of the unknown” after voting to leave the EU on June 23. But the verdict on primary markets was unanimous: closed for the foreseeable.

What began as a week of turmoil for European credit and equity markets amid Brexit uncertainty is ending on a full circle return with no immediate signs that that the UK will begin a formal exit from the EU soon and amid rumours on Thursday that the ECB will relax the terms of its bond repurchase programme.

German carmaker Daimler returned to the Panda bond market following a more than two-year hiatus, raising Rmb4bn ($604m) from a private placement.

Mobile TeleSystems (MTS) bought back over half of its remaining notes due 2020, the company said last week.

The covered bond market was almost impassive to the wider credit market turmoil that followed the UK vote on Thursday to leave the European Union, with the primary market likely to restart in early July. But one major investor said the UK's decision will be worse for peripheral economies as it will trigger a lot of uncertainty about the EU as a whole.