Europe

Boris Johnson, UK prime minister, announced on Tuesday night a 10 point plan for the environment, including phasing out petrol cars by 2030. But policy specialists are disappointed that the plan lacks financing commitments and especially that there is no announcement of a national investment bank.

Giving cheap loans with few restrictions to local authorities via the Public Works Loan Board is not a suitable replacement for central government funding. This must change, or London Borough of Croydon will only be the first council to fall into insolvency.

With the inauguration of US president-elect Joe Biden in January will come increased expectations of further sanctions against Russian figures and corporates. Russian issuers should take advantage of the rally initiated by Biden's election performance and follow their sovereign into bond markets to raise cash while the going is good.

As the UK and the EU prevaricate over the terms of a future trading relationship, equity investors seem to be ignoring the lack of progress in negotiations and the dangerous possibility of a deal between the pair not being struck before the Brexit transition period ends in just a few weeks.

Dollars was the flavour of the day for public sector borrowers on Tuesday as three issuers headed to the currency, raising a combined $12bn. Two more SSAs will follow with dollar deals on Wednesday.

Covered bonds are expected to remain a core funding tool next year and the outlook for supply is likely to improve. However, net of redemptions and central bank purchases, the market will remain highly squeezed.

The European Union was expected to hit the market this week for the third syndicated bond under its Support to Mitigate Unemployment Risks in an Emergency (SURE) funding programme. But with no mandate announcement in sight, the borrower will likely wait until next week, according to SSA bankers.

The EU recovery fund has hit a major obstacle in its journey to capital markets. Hungary and Poland have vetoed the "own resources decision", which would allow the EU to access the bond market on its own account.

Hamburg Airport has launched a Schuldschein deal, following Munich Airport’s entry into the market in early October.

Schneider Electric, the French electrical systems company, has issued what many in the market are calling Europe's first true sustainability-linked convertible bond, in which the issuer agrees to pay investors more if it fails to meet pre-agreed environmental, social and governance targets.

Stadshypotek on Tuesday became the first Swedish bank to issue a euro benchmark covered bond this year, with its first euro deal secured on Norwegian mortgages. The bond was priced at the tightest spread for any covered bond issued outside the eurozone since May 2019.

Alstom, the French manufacturer of trains, trams and buses, has embarked upon its long-awaited rights issue with a fair wind behind it after the recent progress towards a Covid-19 vaccine.