Europe

Investors swarmed on a 12.5m share sale in Verallia, the French glass manufacturer, on Tuesday evening in another example of the recent strong demand and liquidity in the European blocks market.

Europe’s holiday from the budget constraints of the Stability and Growth Pact will soon be at an end, but few are eager to return to austere times and limited borrowing. The EU’s sustainability agenda is a clear way around it.

Bank of Montreal is seeking investor consent to switch from referencing Libor to Sonia on its sterling covered bond, following similar moves from other borrowers. Different calculation methods are emerging for the transition.

FMO, the Dutch development agency, hit the market on Tuesday for a $500m five year bond.

Italy scored its second 10 year BTP syndication of the year on Tuesday as it took advantage of less volatile market conditions ahead of a crucial European Bank governing council meeting on Thursday. Greece will follow with a syndicated tap of its outstanding 10 year bond on Wednesday.

Oesterreichische Kontrollbank hit the market for sterling paper on Tuesday, extending its curve with a 2025 maturity.

Bank of New Zealand (BNZ) priced an €850m seven year covered bond on Tuesday in line with the bid side of Westpac New Zealand’s deal in the same size and tenor issued last week. Although the order book was thinly subscribed, lead managers deemed the quality of orders high.

Banco de Sabadell was up to four times subscribed for a tightly priced green deal on Tuesday — its debut in non-preferred senior format. Other FIG issuers are also considering adding ESG labels to more subordinated products, with Raiffeisen Bank International planning a green tier two for this week.

Eika Boligkreditt and Oma Savings Bank found good demand for their covered bonds sold on Tuesday with small deal sizes, environmental appeal and European Central Bank providing a boost. Even so, syndicate bankers were not convinced the market was back to full health.

Dräxlmaier, the German car parts maker, has launched a sustainability-linked Schuldschein. Deals from the car industry have been few and far between in the market of late. Investors have cooled on the sector, as there have been some high profile problems with specific credits at the same time as the industry undergoes big changes.

Digital 9 Infrastructure, the London-listed fund focused on digital assets, increased the size of its first follow-on share sale due to the strength of demand from investors.

Banks have opened books on another wave of European IPOs in a rush to price them before an expected summer lull. However, some investors predict a possible 50% failure rate across all deals as they push back on valuations and excessive deal flow.