Europe

The current of interest in sustainability-linked finance entered a new district of the capital markets this week — private equity funds-of-funds. AlpInvest Partners, one of the biggest managers in the market, has signed a $650m facility tied to its environmental, social and governance investment practices. But the deal raises the question of the role of transparency in such financings.

Public sector borrowers should be careful what they wish for. Those looking to follow the European Union’s lead in lowering the underwriting fees they pay to banks could cause an unwelcome distortion to their market at a time when getting funding through the door with minimal drama is perhaps more crucial than ever.

The European Central Bank is struggling to maintain its exposure to peripheral European covered bonds this year, due to falling issuance, and has therefore increased its exposure to core European markets. This trend is set to continue, as supply will remain muted — even though banks are running out of eligible collateral to pledge for repo funding.

French telecoms firm Iliad is looking for at least €300m from the Schuldschein market, and is trialing an innovative tenor extension in one of its tranches.

A flurry of dollar issuance hit the market on Tuesday, covering a wide range of spreads and formats.

The European Investment Bank failed to impress market participants on Tuesday with an order book far smaller in size than usual for an Earn benchmark and no move in the spread after guidance.

Germany sold a 30 year green bond via syndication on Tuesday, pricing the trade 2bp through its conventional twin bond of the same maturity and coupon.

IAG, the parent of British Airways and Iberia, has become the latest airline company to tap the convertible bond market for financing during the pandemic, as it continues to burn vast amounts of cash amid a slow recovery in global travel.

Berlin Hyp took advantage of its flat covered bond credit curve and the steepness of the interest rate curve to issue a high yielding 12 year mortgage Pfandbrief on Tuesday, in a larger than usual size.

Believe, the French music streaming and distribution company, is looking to grab investors in what is becoming an exceedingly binary IPO market as it launches in Paris.

Commonwealth Bank of Australia's New Zealand subsidiary ASB Finance issued its largest covered bond on Tuesday, the first 10 year from New Zealand and the first covered bond from the country since January 2019.

A fresh wave of primary equity capital raising is coursing through Europe, with several large issues priced already this week, including a $1.05bn sale by The Hut Group, the UK e-commerce company that went public last year.