Europe

The European Central Bank has warned that some banks face a sharp spike in the cost of their bond funding, as the economic fallout from the coronavirus pandemic begins to translate into credit rating downgrades.

Turkish lender Garanti Bank has raised a syndicated loan, as the country’s top-tier banks continue securing funding at competitive rates.

BNP Paribas took advantage of the thirst for duration in the euro bond market on Thursday, offering investors a chance to get hold of long dated non-preferred senior paper.

Equity bankers have predicted a strong end to 2020 for primary issuance as more companies seek to raise capital to take advantage of bullish market conditions in preparation for 2021.

More airlines are expected to issue new shares and convertible bonds over the coming months as the industry prepares for a recovery in 2021, spurred by the widespread availability of Covid-19 vaccines.

The European Securities and Markets Authority (ESMA) has sent three names to the European Council and the European Parliament as candidates to be its next chair, replacing Steven Maijoor.

Covered bond traders are paring back inventory as they approach the end of the year, though there are a few sectors of the market where they intend to hold positions. High redemptions in the first half of the year will support spreads but January’s issuance glut may not see a rise in new issue premiums.

Two public sector borrowers hit the euro bond market on Wednesday, raising what might well be the final benchmark funding of 2020.

The UK government tightened guidance for local authority borrowing on Wednesday, in a bid to stymie the riskier borrowing-to-invest models certain UK councils have adopted over the past decade.

The UK Debt Management Office provided an update to its funding programme following the Spending Review and the Office for Budget Responsibility’s Economic and Fiscal Outlook on Wednesday.

UK homebuilder Bellway has sold £130m of US private placements, according to market sources, across seven and 10 years. This is likely to be the last broadly marketed USPP deal of the year.

The outlook for Asian covered bond supply will have improved slightly in the wake of Tuesday’s deal from United Overseas Bank, particularly among Singaporean lenders. But issuance from Australia and New Zealand is expected to be more limited, reflecting their banks' priority to get ahead with regulatory funding.