Europe

Four trade bodies have called for the EU Benchmarks Regulation (BMR) to be changed, in order to prevent what they see as the potentially disastrous consequences of third-country benchmarks ceasing to be allowed from the end of 2021.

Berlin Hyp left ‘a little bit on the table’ with its new green covered bond on Tuesday. The trade was followed by deal announcements from Kookmin Bank and Sparebank Vest Boligkreditt, both looking to issue in sustainable format.

Deutsche Bank has joined many of its European peers in looking for savings in the dollar market, opting for an unusual maturity structure with a new tier two deal in the currency on Monday.

Equity issuance has surged during the Covid-19 pandemic in both Europe and the US, and one of the sectors that has printed the most stock in the first half of the year is the biopharmaceuticals industry. In the rush for healthcare innovation, banks say they are busy lining up more deals for the second half.

NN Bank used a quiet market this week to launch the first deal from its new soft bullet covered bond programme. The inaugural deal carried an ‘attractive’ spread and was more than three times subscribed at final terms.

The Finanzagentur has adjusted its issuance schedule for the third quarter of 2020, and has announced its plans for its first ever green deal.

After discussions with US private placement holders, French food services company Sodexo has said it will repay roughly $1.6bn of debt early. Four market sources said this was the largest corporate early repayment of US PPs of all time. Some fear a growing disconnect between institutional investors and companies over financial covenants, and attempts to amend them.

Assicurazioni Generali and Uniqa Insurance are each looking at selling tier two capital from their green bond frameworks, using a quieter period in the new issue markets to explore more complicated and multi-faceted transactions.

Akbank, the top tier Turkish bank, approached investors for a dollar benchmark bond on Tuesday. The deal comes amid expectations that emerging market investors have finally opened up for corporate and financial institution issuance.

The Republic of Poland on Tuesday launched a three year euro bond, while Ukraine mandated banks for a 12 year dollar benchmark. Though bankers say the window is finally open for emerging market corporate issuance, there remains robust appetite for govvie debt.

ThyssenKrupp Elevator (TKE) is a deal of superlatives: the largest European high yield debut, the largest European LBO in over a decade, the last LBO before coronavirus, the most levered debut industrial, and the worst-ever covenant package — or at least, it was at first. Three days after launching the bond leg of the deal, the sponsors and leads capitulated, erasing almost every controversial term in the docs — perhaps the largest ever retreat and the biggest investor victory in the long-running war over bond covenants. But it’s too soon for investors to celebrate, as the episode only highlights how damaging this conflict has become.

Post-crisis reforms have broadly succeeded in ending the concept of ‘too big to fail’, according to the Financial Stability Board, which argued in a report on Sunday that total loss-absorbing capacity (TLAC) rules were making the global banking system more efficient.