Europe

A €600m ($663m) two year financing for China National Chemical Corp (ChemChina) has been opened into syndication. Two French lenders are leading the deal and they have invited a select group of banks to participate.

Chair of the European Central Bank’s supervisory board Danièle Nouy has revealed deferred tax assets (DTAs) are equivalent to nearly half of Greek banks’ own funds.

Greek parliament gave bankers the result they were hoping for on Wednesday night, providing strong market conditions for two well established eurozone issuers — Commerzbank and BPCE — to issue five year bonds, taking a combined €1bn in the covered bond market. Sizable orderbooks and minimal new issue premiums proved that the market is very much in full operating mode.

Lingering uncertainty over Greece put a curb on credit spread movement on Wednesday, as a Greek parliamentary vote on austerity reforms failed to materialise in time to affect the July index options expiry.

Three block trades took place on Tuesday night, as Europe’s equity capital markets appear to be returning to normality after the stress of the Greek debt negotiations of the past few weeks.

An unwelcome slump in deal activity comes just as banks are getting back on the front foot, writes David Rothnie.

Garfunkelux Financial Services, a German debt collection company, on Wednesday became the first European company to break the ice in the mainstream euro high yield market by starting a roadshow for a €365m deal.

Lloyds returned to covered bonds on Wednesday for its annual benchmark in euros. At €1.5bn, the five year was one of the largest this year, and with a book of over €2.5bn, it was one of the most heavily oversubscribed. The strong result was a testimony to the generous new issue premium which catalysed switching interest and caused a healthy repricing of the curve.

High yield borrowers continue to hold back deals and avoid paying steeper issue premiums than they would have faced before the latest Greek crisis, but the new bailout offer is easing fears.

CVC Capital Partners took another swift step towards its exit of Evonik Industries on Monday night, pouncing after the German chemical company’s shares had hit an all time high to sell a block of shares for €519m, in a deal that was increased.

Expanding Swedish pharmaceutical company Recipharm has signed a Skr1.5bn ($176m) term loan with three relationship banks.

French financial institutions and corporates have been quick to jump at the funding opportunity offered by the offshore RMB bond market. Despite the line-up of success stories, however, French asset managers feel the market has some way to go before it comes of age.