Europe

The European Commission has ratified the €100bn Support to mitigate Unemployment Risks in an Emergency (SURE) fund and the European Union debt office has confirmed that it will be responsible for financing loans made under the new programme.

Banque Fédérative du Crédit Mutuel tested appetite on Tuesday for a 10 year non-preferred senior deal, with supply in the asset class having slowed to a near standstill during the coronavirus pandemic.

Investors have poured in orders on the first official day of book building for the Amsterdam IPO of coffee company JDE Peet’s. The company built early momentum with several big cornerstone orders and has continued to attract strong demand from investors because of the strength of its business despite the Covid-19 pandemic.

The European Banking Authority warned this week that lenders could struggle with asset quality problems for years as a result of Covid-19, publishing the findings in its first sensitivity analysis of the EU banking sector.

The head of the Cyprus public debt management office believes that the amount Cyprus can claim under the ESM pandemic support facility “is insufficient to justify any such action”.

Metals and mining company Vedanta Resources is seeking a bridge loan of $2bn to $2.5bn to take its India-listed subsidiary private.

A quartet of SSAs borrowed a combined A$940m ($613.4m) into the Kangaroo market this week, spurring the SSA Aussie dollar market on to its best monthly volume in over nine months.

Lloyds Banking Group has become the latest financial institution to extend the life of an additional tier one capital instrument (AT1), after arguing on Friday that it would be "uneconomic" for it to refinance its €750m 6.375% notes amid the stress of the coronavirus pandemic.

Cyprus may become the first country to access the ESM’s pandemic support line, borrowing 2% of its GDP for up to 10 years.

The Bank of England has reminded UK lenders to apply ‘sound risk management practices’ in the capital treatment of their mortgages amid Covid-19, after the Financial Conduct Authority extended its payment holiday scheme by another three months.

Lloyds Bank decided to tender some of its covered bonds in three major currencies this week in what it called a “prudent approach” towards its liquidity base. The move could prompt more issuance in the asset class this year in an effort to refinance some of the tendered securities, but it could also decrease liquidity at the short end of the curve, given the cheaper refinancing alternatives open to banks.

Ukrainian and IMF officials have come to a preliminary agreement to provide the country with $5bn of aid after president Volodymyr Zelensky signed much-anticipated banking legislation into law. Market watchers have now urged the country to come to the bond market before the situation has a chance to sour.