Europe

A record breaking start to the year for SSA issuance in sterling kept pace this week, as the bond market showed little sign of contagion from a drop in the currency to a seven year low versus the dollar — and indeed may even have received a boost from the devalued currency.

This week the Schuldschein market completed what could be its second largest deal ever, for Aldi subsidiary Hofer, and also launched its first two green deals — in what looks like another impressive year for the market.

Senior capital markets bankers are preparing their teams for months of speculation on Britain’s possible exit from the European Union, after the markets treated them to a glimpse of investors’ uncertainty on the issue this week.

A merger between London Stock Exchange Group and Deutsche Börse could bring huge cost savings and margin benefits — but would concentrate clearing house risk, running directly against the regulatory desire to end "too big to fail".

The long end of the euro curve is wide open for public sector borrowers, after a pair of issuers printed deals this week and speculation grew that further central bank stimulus is on the way.

Spain and Portugal continued to suffer political turmoil this week, with bankers worrying that Spain’s troubles might lead to a widening of its spread over Italian bonds.

United Kingdom

In its annual results released on Thursday, British coach company National Express reported increased revenues, profits and margin year-on-year in every division. The company has taken extra precautions ahead of its bond refinancing, however, by signing a new bridge-to-bond facility.

Mounting clamour around the prospect of the UK voting this summer to leave the European Union raised the risk stakes for currency and options traders this week, but some volatility traders preferred to pin their hopes on the European Central Bank producing another ‘big bazooka’ next month.

3i and BNP Paribas, two of the largest shareholders in Eltel Networks, launched a block trade for 15% of the business on Thursday night.

UBS launched the first euro senior bank holding company bond of the year on Thursday, but bankers were divided over the trade’s pricing, as well as whether more could follow.

Pirelli will not refinance its €6.8bn acquisition bridge loan in the bond market as planned. A torpid high yield bond market has spooked the borrower away from capital markets and back to bank loans.