Europe

Phoenix Pharmahandel, the German pharmaceutical company, issued a five year euro-denominated bond on Wednesday, as pharma companies across the credit spectrum continue to hold investors’ attention.

The primary capital markets issuance boom of the past three months helped Barclays report strong investment bank results for the second quarter on Wednesday.

Deutsche Bank on Wednesday released a stellar set of results for origination for the second quarter, compared with consensus estimates, its previous results and to a lesser extent competitors. Henrik Johnsson, co-head of European banking and capital markets, said that the bank’s strengths became more valuable during the coronavirus crisis.

CEA Investissement, the corporate arm of the French Alternative Energies and Atomic Energy Commission, has sold €104m of shares in Soitec, the French semiconductor company, through an auctioned block trade won by Société Générale.

Mitie Group, the UK outsourcing and facilities management company has completed its £200m rights issue, with over 93% of shareholders taking up their shares with the remainder sold to the market on Wednesday morning.

The primary market for covered bonds with environmental, social or governance (ESG) purposes has been exceptionally strong this year, and with the European Union’s Taxonomy regulation recently coming into force and strong execution happening even in difficult market conditions, there are high hopes that issuance will scale new heights.

European Banks are seeing a rebound in their common equity tier one capital ratios in the second quarter, as they draw on new measures of regulatory relief to guard themselves against a tougher operating environment.

Fintech was one of the hottest sectors in equity capital markets in 2019 and it seems to have lost none on its appeal during the coronavirus pandemic, as two deals on Tuesday demonstrated.

Subordinated bond issuance could decline dramatically among Nordic banks following implementation the EU’s new bank recovery and resolution directive (BRRD 2), Fitch said this week.

BE Semiconductor, the Dutch semiconductor maker, has followed its peer STM Microtronics into the equity-linked market this week by selling a €150m seven year convertible bond.

A prospective improvement in the European Central Bank’s deposit tiering facility mitigating the punitive impact of negative rates should be bad for covered bonds, 95% of which are negative-yielding. However, the unprecedented scale of reserves held on deposit with the central bank implies that many key investors will still be looking for anything that pays more than its deposit rate of minus 0.5%.

When the European Central Bank (ECB) is suggesting the additional tier-one market could cost the euro area up to 0.25% of GDP growth in the next year and a half, it is probably time to start thinking about reforming the asset class.