Europe

Italian MPs are threatening to use a vote in parliament this week to derail a recent EU agreement on planned reforms for the European Stability Mechanism (ESM).

Scepticism about transition bonds has receded, according to Snam, the Italian gas distribution company that is the product’s leading issuer. While some ‘dark green’ investors still do not want to buy its bonds, many others do. One day, the company may officially be able to call its bonds green.

North Star Housing, a housing association in the northeast of England, has sold £80m of 40 year debt to Pension Insurance Corp, as housing associations prove the saving grace of an otherwise muted year for private placements.

Barclays has invited holders of some of its legacy tier two bonds to exchange their notes for cash, as it looks to smarten up its debt capital structure.

Henrik Stille, senior portfolio manager at Nordea Asset Management, talked to GlobalCapital about the covered bond market and the incredible returns that his strategies have delivered this year, from traditional long-only solutions to innovative leveraged alternatives.

Emerging market bond mandates are continuing into the last month of the year, despite expectations that activity would quieten down after a jam-packed year of issuance. Kuwait’s Burgan Bank and Montenegro are among some of the CEEMEA issuers seeking to take advantage of unfalteringly attractive credit conditions.

Saxony elected to bring a 15 year benchmark to market on Tuesday, launching the deal in an otherwise deserted primary market. The negative yield told against the deal, which was sold without being fully subscribed.

Société Générale took advantage of superlative conditions in the US dollar market at the start of the week, raising $2bn of funding with a tightly priced deal in non-preferred senior format.

New York-based hedge fund Third Point has offloaded a £42.3m chunk of its stake in Energean, the London-listed oil and gas producer focused on the Eastern Mediterranean.

Covered bond participants will be looking eagerly to the European Central Bank’s policy meeting this Thursday in anticipation of a host of new stimulus measures, the most important of which is likely to be the targeted long term refinancing operation, where lower rates for longer are expected to impinge on supply.

The European Central Bank is set to meet on Thursday and is widely expected to announce a substantial increase to its Asset Purchase Programme. Antonio Cavarero, head of investment at Generali Investments, expects the ECB to stand foursquare behind European government borrowing.

The UK wing of the US private placement market has shed over a third of its year-on-year volume, as the private debt instrument has struggled to stay competitive with bank loans and the sterling bond market. Agents argue that illiquidity premiums must drop for the market to regain its appeal.