Europe

Italy is set to benefit from a Bank of Japan-induced rally in eurozone government bonds late last week after mandating for a 30 year benchmark on Monday — and bankers suggest Spain could follow with a similar deal.

Clydesdale and Yorkshire Bank Group was due to close the book for its IPO at 2pm on Monday, having put out a final message to inform investors that orders below 180p a share risked missing out. At that level, the deal size would be £397.5m.

Abbey National's €1bn five year issued Monday was comfortably oversubscribed but exhibited some price sensitivity.

Caixabank has become the fourth Spanish bank to tap the covered bond market this year with its largest Cédulas in five years. That four borrowers have launched similar sized deals of around €1.5bn so far this year suggests volatile market conditions are causing banks to frontload their funding.

Some of Deutsche Bank’s additional tier one (AT1) bonds plumbed new depths in the secondary market on Monday as more investors began to worry about the lender’s ability to pay coupons on the notes.

Clydesdale and Yorkshire Bank Group, the UK mid-sized bank being spun off by National Australia Bank, has tightened the price range of its London initial public offering to the low end.

Société Générale has become the latest big name bank to pull back from a government’s bond business, after it resigned as a Gilt-edged market maker for the UK Debt Management Office on Friday.

This week's funding scorecard looks at the funding progress of French agencies

Principality Building Society priced its Friary No.3 prime UK RMBS deal, landing £475m in what one banker called a ‘tricky’ market. As with sterling covered bonds, the RMBS primary market also seems to be pricing at successively wider levels.

AIB Mortgage Bank attracted robust demand for its €1bn seven year covered bond issued on Thursday, and WL Bank also did well despite the difficult 10 year tenor and measly spread.

UK Asset Resolution, the UK government’s holding company that has owned the mortgage book of Bradford and Bingley (B&B) since its nationalisation in September 2008, has announced a tender offer and early redemption of the issuer’s covered bonds.

Credit markets endured another rollercoaster week as persistent nervousness prevailed over intermittent optimism and soured an earlier rally.