Europe

Société Générale and Natixis have purged their senior ranks following second-quarter losses and to prepare for strategic revamps, but David Rothnie thinks the future will remain challenging for both.

An improvement in the cross-currency basis swap has made dollar funding look more attractive to covered bond issuers, but this is not expected to lead to higher supply with bank senior unsecured dollar paper looking the more compelling option.

The Inter-American Development Bank (IADB) broke the silence in the SSA market with a Canadian dollar sustainable development bond. The deal shared the market with a dollar trade from Kommuninvest, with both issuers steering clear of the almost dormant euro market.

Convertible bond market participants are expecting a busy September for new issuance, including a potential resurgence of distressed deals if an economic recovery from the pandemic and associated lockdowns fails to materialise.

A technical issue around data submission meant that the euro area short term rate (€STR) did not have enough data to be calculated in the usual way on Tuesday morning, forcing the ECB to use its contingency method.

VC Trade, a digital platform in the Schuldschein market, has begun promoting secondary trading on its system, with an eye of scaling up into Europe’s loan markets.

The UK Municipal Bonds Agency (MBA) has picked banks for its second trip to market, eyeing the ultra-long end and once again raising cash on behalf of Lancashire County Council. Although the bond will be in conventional format, the MBA is looking to issue green bonds in the future.

Political unrest in Belarus has thrown up difficult questions for emerging market investors, as ESG concerns rise and those who would buy still not seeing an attractive opportunity to do so.

Citi has taken market share from other banks in the past year to become one of only four that account for 60% of all secondary market covered bond volume traded on Bloomberg so far this year, thanks to a combination of devoting balance sheet to trading and having the appetite to take risk.

FIG market participants expect a smooth return to euro bond issuance from next week, with bankers and investors now set up to facilitate deals where ever they may be.

S&P has warned there is no smooth way for banks and insurers to direct proceeds from debt capital instruments towards specific green financing objectives. It recommended that these issuers instead focus on making broad commitments through their green subordinated bonds.

Private equity firms EQT Partners and Vaaka Partners have offloaded €118.5m of stock in Musti Group, the Finland-based pet store, in an otherwise barren week for block trades in EMEA.