Europe

Investors were eager to buy a euro benchmark seven year covered bond from NordLB Luxembourg on Wednesday, enabling the bonds to be priced flat to the issuer’s curve. That illustrating the strength of demand in what one lead manager described as a “hot” market.

The Republic of Hungary won a €7.25bn order book on its debut in green bond markets on Tuesday, printing a €1.5bn trade.

Mitsubishi UFJ Financial Group (MUFG) has become the second bank to issue a Covid-19 bond in the euro market following the example set by BBVA in May.

Samruk-Kazyna, the Kazakh sovereign wealth fund, raised $206.7m on Tuesday night through a share placing in Kazatomprom, the country’s state uranium company. Emerging markets investors, who have been lacking new paper during the coronavirus crisis, lapped up the shares.

Spanish house prices fell for the first time in four years in the first quarter this year, but even so, the Cédulas market is in a much stronger position to weather further expected falls than it was when house prices dove in 2007 and 2012. And based on the recent performance, even if spreads were to widen, some investors would be likely to consider the move as an opportunity to buy.

Banks are taking a greater share of issuance in the bond markets in the middle of the second quarter, with a spread rally opening the way to deals in all currencies and across the capital structure.

Several market players have said family offices in need of cash are struggling to come to terms with restrictions on companies that have taken state aid to survive the coronavirus pandemic paying dividends. This has made other forms of debt, such as Schuldscheine, with no bans on dividend payments, more attractive.

Nordea has made extensive use of Nordic currency covered bond markets through the coronavirus crisis and, as spreads have stabilised, has selectively issued senior preferred deals across a broad range of other FX. The bank says it has plenty of time to meet its regulatory funding needs and has no imminent plans to issue subordinated debt given the recent relaxation of capital requirements.

China Pacific Insurance (Group) Co has won approval from the mainland securities regulator to move ahead with its stock offering on the London Stock Exchange.

The meat, dairy and fish industries are harbouring grave risks of causing future pandemics, and must radically improve their safety procedures, according to an investor coalition which controls $21tr of assets.

The ECB published its first release of the data showing its purchases under its Pandemic Emergency Purchase Programme (Pepp) on Tuesday, shortly before adding €600bn to the scheme on Thursday. The central bank revealed that it has bought proportionately much less French government debt than the bonds of Italy, Germany and Spain.

The coronavirus pandemic is causing many unintended consequences for working practices in the capital markets. One welcome development could be a shake-up in the way European IPOs are run and managed, which is long overdue.