Europe

ABN Amro and Commerzbank have proven that the additional tier one (AT1) market is wide open for business, after they clocked up more than €17bn of combined demand for their two new deals on Monday.

The Austrian treasury has shaken up its funding outlook for the year as a result of the Covid-19 pandemic. Its new planned issuance total is almost double the previous target.

Three European companies, one of them a high yield issuer, jumped into the corporate bond market on Friday, the first to test the waters after the European Central Bank's promise the previous day to top them up with another €600bn of liquidity through its Pandemic Emergency Purchase Programme (Pepp). They found overwhelming demand, leading to fast sales, an increase and deeply negative new issue premiums.

Slovakia will not be making use of the European Stability Mechanism’s pandemic crisis support lines, because of concerns that investors would look negatively on the decision.

Stobart, the UK infrastructure and aviation company which owns London Southend airport and was a part owner of UK airline FlyBe, won wide support from equity markets on Thursday evening, giving the company the funds to manage through the coronavirus pandemic.

Berlin Hyp has launched tender offers on four of its euro covered bonds in an effort to optimise its funding costs and provide liquidity to investors. The issuer also plans a new long dated covered bond.

Rating agency Scope beat many European agencies to the punch in adopting new covered bond rating methodology in 2015, which is today considered a standard approach. But the European Securities and Markets Authority (Esma) is fining the agency on the grounds that it failed to apply it consistently and with the regulator’s permission.

Additional tier one capital (AT1) issuance has been conspicuous by its absence amid an incredible recovery in the bank finance market in recent weeks. Bankers now argue that new supply in the asset class could be just around the corner.

Two foreign issuers and a red-chip company tapped China’s onshore renminbi bond market this week, taking home Rmb6.2bn ($875m). Two more red-chip borrowers are waiting in the wings, with their deals slated for next week.

Financial market participants have watched in disbelief this week as asset prices have kept rising, while US cities burn, unemployment breaks records, a global depression becomes more likely and the coronavirus pandemic still rages.

Bondholders in the now infamous EA Partners notes received more bad news this week when Air Serbia, one of the lenders from the special purpose vehicles (SPVs) warned that it could default on its obligations.

The European Central Bank delivered a welcome — and bigger than expected — increase to both the size and scale of its Pandemic Emergency Purchase Programme (Pepp) on Thursday, causing eurozone periphery spreads to ratchet in while staving off concerns of debt sustainability for the moment. Lewis McLellan reports.