Europe

New research from analysts at Helaba points to a flight to safety in the Schuldschein market over the course of 2020. Rated issuers are making up a bigger share of deals than they have for a decade, and there have been next to no debuts. Schuldschein arrangers hope this conservative trend does not continue into 2021.

Deutsche Pfandbriefbank attracted more demand for its first Sonia-linked Pfandbrief on Thursday than it has for any covered bond it has ever issued. It was the first public deal from a financial institution with a guaranteed high coupon.

Take-up was higher than expected for the European Central Bank’s latest series of Targeted Longer-Term Refinancing Operations on Thursday. But an overall allotment of €174bn still paled in comparison with the last round, as banks showed they already had plenty of excess liquidity on their balance sheets.

The European IPO market is continuing to churn out deals, but a return of volatility in secondary equity markets is starting to cause discomfort among syndicate bankers, who say they must proceed with caution in the weeks ahead.

Diploma, the UK maker of seals, wiring and healthcare equipment, got solid support from its shareholders and new investors as it raised £194m of equity on Wednesday to complete the acquisition of a US cable distributor.

JP Morgan and Morgan Stanley’s positions at the top of the UK corporate broking rankings have undoubtedly helped their equity capital markets businesses, but Goldman Sachs stands out for its disruptive approach, writes David Rothnie.

Norway’s Ministry of Finance has said it will apply tighter mortgage lending standards from next week after temporarily loosening them to support the economy. The move, which was not unexpected in light of the resilient state of the economy and stubbornly high house price inflation, will minimise mortgage defaults.

Informa, the UK publishing and events business, has said it is considering paying back its private debt placements and issuing bonds instead. Companies tend to avoid early repayment in the PP market because of the cost of makewhole payments, but several market sources said Informa was trying to extricate itself from financial covenants.

Swedish Export Credit Corporation took full advantage of the quiet SSA market to print a three year dollar benchmark on Wednesday. Ontario Teachers Finance Trust is set to follow on Thursday.

China Yangtze Power, a Chinese utility company, has launched its listing on the London Stock Exchange, becoming the third company to list in London through the London-Shanghai Stock Connect scheme. The deal is expected to be worth up to $3.4bn.

Spain’s expected bond syndication, thought to be coming this week, now appears unlikely, according to several SSA bankers.

Debut issuers Bausparkasse Schwäbisch Hall and Sumitomo Mitsui Trust Bank are marketing their inaugural covered bonds amid a pick-up in secondary market trading.