Europe

The European Central Bank has asked financial institutions to justify why they are using additional tier one and tier two bonds as sources of internal capital, highlighting its concern that the instruments lack real economic value.

A temporary forum created by the European Central Bank to discuss the proposed European Distribution of Debt Instruments (EDDI) project will hold its first meeting in September.

Christina Too and Gordon Butterworth will join Deutsche Bank as managing directors in its healthcare investment banking coverage and advisory team for Europe, the Middle East and Africa.

Arthur van der Goes is joining William Blair’s investment banking franchise from Rabobank.

Nomura has ambitions to improve its covered bond market making presence, but it has a long way to go before getting close to the top, where Citi, Santander, and JP Morgan all occupy a clear lead, according to investors.

Bankers in advisory, as well as the management at banks, are likely to receive lower bonuses this year, according to Johnson Associates, a compensation consultant for the financial sector. However, traders and bankers working in underwriting are in line to enjoy a boost.

Lloyds has bought back a small amount of sterling covered bonds on a bi-lateral basis. Most investors that wanted to hand back bonds will have already done so in its previous public tender offer.

The huge swathe of dividend cuts UK companies have made because of lockdown has created an opportunity, to issue equity capital, for those that have not stopped returning money to their owners.

HSBC Holdings has launched a tender offer for nine short-dated senior securities in dollars as it looks to optimise its liability structure for the total loss-absorbing capacity (TLAC) requirements. The announcement followed a dual-tranche senior deal in the same currency.

Institutional investors holding Hammerson’s £689m ($900.27m) of private placements (PPs) are to be offered a pre-payment option first after the UK property company’s intended rights issue, according to a prospectus on the upcoming trade. Unlike the UK property company’s bondholders and bank lenders, during their coronavirus amendment process, PP investors negotiated an offer of pre-payment at par of 30% of any proceeds of capital raises or disposals.

European banks will be subject to some of the Federal Reserve’s highest capital targets, after the US regulator switched to using stress test results as the main input for its requirements.

Barclays is building up sustainability coverage in its investment bank with new positions announced globally on Monday and effective immediately.