Europe

Deutsche Hypo took advantage of the public Pfandbrief market before the coronavirus crisis struck and since then has been busy issuing privately placed senior deals. Spreads have since tightened, which should help issuance bounce back. But ready access to favourable European Central Bank repo funding means supply will be restricted. Some parts of the German commercial real estate market are likely to be facing trouble too, but even so, Pfandbrief investors are well protected.

Uralkali, the Russian potash fertiliser producer, signed a $665m pre-export facility (PXF) with a consortium of international banks, as lenders say that Russian borrowers seeking funding are finding pricing remains the main point of contention with lenders.

A pair of foreign banks mandated senior unsecured Australian dollar transactions on Monday: Sumitomo Mitsui Banking Corp is out with initial price thoughts through its Sydney branch, while the Canadian Imperial Bank of Commerce is preparing a Kangaroo benchmark.

The International Finance Corp returned to the Australian dollar bond market to fund its response to the coronavirus pandemic on Monday, while at the end of last week BNG capped the strongest month for SSA Kangaroo deals for over nine months.

KfW has made the first adjustment to its 2020 borrowing needs by doubling the size of its US commercial paper programme, with the Gerrman agency set to review its overall funding target at the end of June.

Strong market conditions and tight spreads should encourage a few covered bond issuers to consider returning to the market in June, and though balance sheet optimisation is likely to remain the biggest driver of primary market activity, a surge in covered bond redemptions will play a critical role.

The Financial Conduct Authority expects that a court case determining whether UK insurers have to pay out on business interruption claims as a result of Covid-19 will be settled by the end of July.

Deal arrangers said on Monday that banks would not be dissuaded from bringing new bond deals to the market, though spread levels have started showing their first signs of weakness following an extraordinarily strong month in May.

UK fashion group Ted Baker is seeking £95m of emergency funding via a firm placing and open offer after making a steep loss in its 2019 financial year.

DNB entered 2020 better capitalised than ever, and having taken the opportunity to get ahead with its regulatory funding at the end of last year, it was also better financed than ever. Even so, following the regulator's decision to delay implementation of MREL target by one year, DNB could return to the covered bond market in the latter half of 2020.

The supervisory authority for Italian insurance companies (Ivass) has urged Cattolica Assicurazioni to raise €500m of capital before the autumn, having become concerned about a decline in the company's solvency ratios amid Covid-19.

Flutter Entertainment, the parent of bookies Paddy Power and Betfair, has sold £812m of new shares to institutional investors to reduce debt and position itself for further growth once sporting events around the world are allowed to resume and its retail stores are permitted to reopen.