Europe

Regular credits in the private placement markets in Europe, like UK utilities, have disappeared from the scene since the coronavirus pandemic began because investors have not managed to reduce their yield targets to compete with pricing in public markets. Silas Brown reports.

Despite the coronavirus crisis and uncertainty about the November US election, the Swiss franc market is feeling optimistic for the second half of the year, expecting a strong run of issuance until late autumn.

KfW tapped an October 2034 line on Tuesday, enjoying impressive demand for the €1bn trade after the strong performance of the Bund curve sent investors hunting for yield.

The transposition of the covered bond directive into national legislative frameworks is expected to have been completed by all member states within the next six months. But the clock is ticking, and a decision on whether to postpone implementation will be discussed in September.

James Palmer has been named interim head of equity capital markets for Europe, the Middle East and Africa at Bank of America. He replaces Sam Losada, who is leaving the bank to join Morgan Stanley.

Erste Abwicklungsanstalt (EAA) is considering a return to the euro market in the fourth quarter to complete its funding programme.

Credit Suisse is bringing its disparate markets and investment banking operations into one division, it announced on Thursday, as new chief executive Thomas Gottstein draws out a fresh structure for the bank. The bank is aiming to create savings to be invested elsewhere, but did not give much detail about where cuts would be made.

After reaching a provisional agreement with member states, the European Commission is expected to open a consultation to amend the liquidity coverage ratio (LCR) for banks during the fourth quarter. The revision is expected to improve the efficiency of covered bond funding as issuers will now be able to count the same 30 day liquidity held within their covered bond programme towards the LCR too.

The Co-operative Bank has said that its future could be in ‘significant doubt’ if it fails to make headway on plans to raise £550m ($719.46m) for its minimum requirements for own funds and eligible liabilities (MREL) by 2022. The UK lender is hoping to get going in the second half of this year.

The European Financial Stability Facility finished its €5bn Q3 funding programme on Wednesday with a €1bn tap of an October 2026 line in an auction. The European Investment Bank was also in the market on Thursday adding to a Climate Awareness Bond.

Banks will have a very small window for issuing debt in the rest of 2020, with fears over rising coronavirus infections and US politics expected to bring volatility back into the market, deal arrangers have warned.

This week's funding scorecard looks at the progress of Europe's supranationals and agencies at the end of July.