Europe

Mortgage payment holidays across Europe, offered to help borrowers cope with the economic effects of lockdown, were highest in UK covered bond pools, according to the European Covered Bond Council’s newly updated harmonised transparency template (HTT). But that reflects the ease with which homeowners could apply for the breaks rather than the likelihood of those loans turning into bad ones.

The needs of the economy during the coronavirus pandemic could alter the Single Resolution Board’s assessment of whether a failing bank needs to be put into resolution or insolvency.

German pharmaceutical company, Phoenix Pharmahandel (Phoenix Group), held investor calls on Monday after mandating banks for a sub-benchmark sized offering in euros. The deal is the latest stab at funding by a pharmaceutical company — a sector which has lured greater numbers of investors thanks to the coronavirus pandemic.

Equity capital markets have been relentless since the first coronavirus rescue issues in the spring. There is no let-up, with several large deals announced in the past fortnight and scheduled to be priced in August. However, bankers are worried that tired investors are near breaking point.

ANZ has altered the pre-maturity test of the hard bullet transactions in its covered bond programme, by doubling the time the covered bond guarantor has to sell assets. The "investor-friendly" update, which improves rating stability, follows ANZ’s recent downgrade and could be of interest to other issuers in a similar situation.

The additional tier one market is putting too much emphasis on the risk that banks will try and extend the lives of their bonds, according to Atlanticomnium, suggesting there is plenty of room for the asset class to rally this year.

A new study from the European Central Bank has found that phasing-in capital requirements can lead to a significant boost in bank solvency levels, but that it can also contribute to an increase in risk-taking.

Coronavirus spikes and Sino-American diplomatic tensions over the weekend spooked investors, driving a sell-off in European stocks and a rally in Bunds as cash flocked to safe assets. But an interview with ECB board member Fabio Panetta has brought some comfort to eurozone periphery investors.

The UK government’s decision over the weekend to reintroduce a quarantine on travellers from Spain is set to make a rights issue far more difficult for International Consolidated Airlines Group (IAG), the airline holding company which owns British Airways, according to equity capital markets sources.

HSBC has become the latest bank to create a dedicated team for sustainable finance amid the coronavirus crisis. This is part of a new strategic solutions group, which will also house two other solutions units: one for corporate finance, and one for financial institutions and capital.

The EU parliament has voted for a resolution threatening to reject the EU’s budget proposal. The proposed budget includes the €750bn coronavirus recovery fund, which has helped to drive peripheral eurozone sovereign spreads tighter over the past month.

This week's scorecard looks at the progress Nordic agencies have made in their 2020 funding programmes in late July.