Europe

A wave of companies from some of the most distressed industries will test risk appetite with rights issues this autumn, such as shopping mall landlord Hammerson and International Airlines Group, the parent of British Airways. These firms may raise the money they need and survive, but investors would be well advised to exercise extreme caution, for the future is not bright.

Consciousness of environmental, social and governance factors is snowballing among private debt and equity investors, prompting them to seek new answers to the conundrum of how to obtain adequate ESG information on private companies. Providers are trying to meet the demand, including with innovative products.

Serco is set to sell US private placements, according to market sources, a rarity from the UK support services since the sector fell into hot water with PP investors a few years ago.

Two agencies were out with dollar mandates on Monday and more public sector borrowers could follow with deals this week as a rise in US Treasury yields boosts demand for SSA dollar bonds.

Covered bond issuance usually picks up around this time of year and bankers believe next week is likely to be particularly promising. Though funding needs have generally been cut, borrowers may be tempted to move before an expected surge in competing EU government bond supply that is likely to make covered bonds look expensive.

Equity capital markets bankers are expecting to have more mergers and acquisitions to finance in the coming months as companies seek to acquire rivals weakened by the Covid-19 pandemic or try to save themselves by bulking up.

A financial markets legal charity has warned the UK against diverging from EU law through its transposition of the Bank Recovery and Resolution Directive (BRRD II), arguing that significant changes could increase the ‘operational burden’ on firms after Brexit.

Bank capital funds have been recouping losses and welcoming new inflows after suffering heavily in the early stages of the coronavirus pandemic.

Unibail-Rodamco-Westfield (URW), one of the largest owners of shopping malls in the world, is considering a large rights issue to reduce its leverage as the retail industry grapples with the economic fallout of the global Covid-19 pandemic.

Kommunalbanken has raised its borrowing requirement for the year back to its initial target as a result of a strong performance in the Norwegian Krone over the summer.

The three major rating agencies have upgraded UBI’s credit rating, to be in line with Intesa Sanpaolo’s as the latter's takeover of the former concludes. Market participants are expecting UBI’s covered bond spreads to tighten as a result.

Banks in the EU have spent the last four years changing the terms and conditions of new issues to create a sense of certainty over how English law bonds will be treated after Brexit.