Europe

Fédération des Caisses Desjardins du Québec (CCDJ) mandated leads on Wednesday for a five year and Compagnie de Financement Foncier (CFF) mandated leads for a 10 year deal, to take advantage of exceptionally strong market conditions with both deals likely to be launched on Thursday.

A trio of covered bonds from NN Bank, Bawag and Eika Boligkreditt that were issued on Wednesday, were all exceptionally well subscribed, though the Norwegian deal stood out as it was priced considerably through fair value. The transactions suggest secondary spreads are less representative of fair value and send a strong signal to non-Eurozone issuers with illiquid curves.

The Republic of Bulgaria issued a €2.5bn dual-tranche bond on Tuesday to support its expanding state budget, following a raft of its regional peers which are responding to the Covid-19 crisis with substantial deals.

Falck Renewables, the Italian renewable energy company, has issued a €200m green convertible bond, joining the swathe of companies that have moved into the asset class recently.

It has already been another busy week for European block trades with several accelerated deals priced on Tuesday evening. Bankers say they expect the rush to continue sellers look to shift as much paper as possible before November's US election.

Commerzbank and Unipol Group ‘ticked all the boxes’ with their new green senior transactions on Wednesday, amassing large orders from investors.

Fitch cut the long-term issuer default ratings (IDRs) of ABN Amro and Rabobank this week, with a rise in risk-weighted assets having helped to push down the size of the banks’ subordinated bond buffers.

Shares in The Hut Group (THG), the UK e-commerce company, soared in trading on Wednesday morning, its first day as a public company.

UniCredit sold a $1bn non-preferred senior bond in the dollar market this week, as it made further headway on its total loss-absorbing capacity (TLAC) plans for next year.

Surging covered bond issuance that is printed only for repo at the central bank and official sector purchases means that the asset class is now less relevant for market funding purposes than ever before. If this continues, the systemic importance of the €2.7tr global market will be undermined just as efforts to develop it look to bear fruit.

In just a few days, two of the UK’s largest companies have had acquisition offers made for them by North American rivals. Heading into the 11th hour of a still chaotic Brexit process amid the highest national redundancy levels since the global financial crisis will have more foreign buyers circling yet.

Investors think that insurance companies will be able to deal with the cost of business interruption (BI) claims relating to Covid-19, even though the UK High Court found in favour of policyholders in a test case this week.