Europe

European IPO investors are becoming far more selective and this is leading to a binary market, where deals either soar or struggle.

Nationwide Building Society issued the first UK covered bond of the year, the first to test appetite since Brexit was concluded and the first UK deal with a 20 year tenor in euros. As such it offered a particularly rare opportunity to get some spread and yield pick-up.

Morgan Stanley and Goldman Sachs received a warm welcome in the euro market this week, as they turned to the currency amid what one banker described as a “US bank supply wave”.

There are plenty of reasons to be cheerful about first quarter bank results, but it’s too early to be excited.

Spac mania is taking off in Europe, with the largest European blank cheque company IPO so far successfully pricing this week, and more deals in the works.

Muenchener Hypothekenbank (MuHyp) priced the tightest ultra-long dated Pfandbrief in 18 years this week, setting the record a day after Bayerische Landesbank (BayernLB) priced the tightest covered bond of the year and the tightest Pfandbrief since late 2018.

Taylor Maritime Investments, a new London investment trust, has launched an IPO on the London Stock Exchange with the aim of offering investors a chance to invest in the recovery of the global shipping industry after the Covid-19 pandemic.

Bank capital investors believe yields could reach new record lows in the European additional tier one market, as another positive earnings season helps to lessen the “perceived riskiness” of the asset class.

NatWest Group recorded a loss at its investment bank on Thursday, after climbing down from the dizzying heights of last year’s first quarter profits. The weaker numbers weighed on the performance of the group, but the bank still managed to breeze past market expectations.

The Development Bank of Kazakhstan on Thursday launched a dual tranche bond in dollars and Kazakh tenge. Investor interest in emerging market local currency debt has increased over the last year, as the hunt for yield grows.

Origin Housing, a housing association with homes in and around London, has sold £125m of US private placements – one of the bigger deals from the sector.

UK retailer WH Smith has tapped the convertible bond market for the first time as part of a wider refinancing package intended to position it for a return to growth this year once Covid-19 restrictions are lifted.