Europe

NN Bank has announced plans to set up a soft bullet covered bond programme, which is likely to result in a considerable saving in the cost of funding relative to its existing conditional pass three (CPT) programme and enable it to access long term funding with maturities beyond 10 years which, until now, are tenors that have not been available.

Banks in the UK have built up large enough capital buffers to withstand the volume of credit losses expected to be triggered as a result of the economic shock of the Covid-19 pandemic, the Bank of England said.

Rentenbank jumped into a quiet Kangaroo market on Thursday to print its first Australian dollar bond since August 2019.

Mortgages in covered bond pools that fall 90 days past due typically then become ineligible for inclusion and are replaced. But, the unprecedented volume of mortgage moratorium initiatives and other forbearance measures introduced in response to the coronavirus pandemic means the market must now offer a degree of latitude, which it is planning to do with the launch of new transparency measures.

The Bank of England said on Thursday that it would be changing the way it looks at Pillar 2 capital targets, giving UK lenders more room to breathe during the coronavirus pandemic.

Equity investors remain fully committed to backing capital raised for companies wishing to repair their balance sheets but they are far more discerning when being asked to look at secondary sell-downs, given worries that equity markets are overinflated and their desire to save capital for primary deals.

The UK Debt Management Office has picked the banks to lead the sale of its new October 2061 conventional Gilt, which will be its second of an unprecedented two syndications in a single calendar month.

Capital markets have not seized up when mediated through the home office. But with remote working set to be the norm for the foreseeable future, the finance industry must be alert to less perceptible problems.

Morgan Stanley Investment Management makes two SRI hires — Citi appoints Aby for CEEMEA markets — Callaghan joins HSBC for UK M&A

Germany's Federal Constitutional Court (BVG) fired a warning shot at the European Central Bank this week. The court’s threat to stop the Bundesbank from taking part in official asset purchasing could have serious consequences for ECB monetary policy and, by extension, bond markets, just when the markets seem to be relying on the central bank more than ever, write Jasper Cox and Lewis McLellan.

Natixis’s corporate and investment bank slumped to a loss in the first quarter, results showed on Wednesday, as it provisioned for credit losses and took a similar hit in equities to its French peers.

European lenders are debating whether it is worth them taking advantage of new IFRS 9 transitional rules, with some market participants suggesting they will largely ignore any capital benefit gained through these sorts of relief measures.