Europe

France has outlined plans to issue a new 20 year syndicated bond, confirming market speculation that the sovereign was looking to join its eurozone sovereign peers in tapping the capital markets to finance its revised funding programme for 2020 in response to the coronavirus pandemic.

Investors lapped up Axa Bank Europe’s €250m tap of a 15-year Obligations Foncieres on Monday and showed that demand for ultra-long dated paper is back on the table. And, being considerably longer than the funding offered by the European Central Bank, the transaction should give a boost to the primary market, despite downbeat supply expectations.

Intesa Sanpaolo became the first Italian bank to raise funding during the coronavirus pandemic this week. It offered a healthy premium for its five year senior deal, but the bonds have performed very well in the secondary market.

Unédic, the French agency responsible for French unemployment support, entered the social bond market on a permanent basis on Friday, launching its new social bond framework under which all its debt will be issued from now on. It christened the new programme with its largest bond in 10 years.

Sappi, the South African pulp and paper company, decided just before lunchtime on Friday to cancel a €250m bond issue, judging the price it would have had to pay too high. The failure of this deal contrasts with the vigorous issuance by much riskier companies in the US market.

Yapi Kredi is the latest Turkish bank to refinance existing debt, following peers like Akbank and VakifBank. But bankers said that margins on its deal do not reflect current market conditions.

Italy has announced the details of a new BTP Italia sale, which will take place from Monday May 18, and be aimed at financing measures in response to the Covid-19 pandemic.

The UK covered bond market may be about to shrink. Deals maturing this year could well be refinanced at the Bank of England, while issuers could see their mortgage pools shrink as a result of the lockdown.

Barclays opened books on a new tier two capital issue in sterling on Friday, as the financial markets looked set to end a volatile week on a positive note.

This week's funding scorecard looks at the progress of Europe's supranationals and agencies in the middle of May.

Boohoo, the UK online fashion retailer, priced a £197.68m equity capital raise on Thursday night, to raise funds to take advantage of M&A opportunities in the global fashion industry brought about by the coronavirus pandemic.

Allianz was calling for investment in a €1bn tier two capital issue on Friday, a couple of days after disclosing a tough set of results for the first quarter. The weaker performance largely stemmed from Covid-19, which weighed heavily on the German insurer’s Solvency II capital ratio.