Europe

The European Central Bank’s purchase programme will do little to aid agencies in raising cash in the commercial paper market, making little difference to rising borrowing costs and expanding programmes, according to Jérôme Margerin, head of short-term funding at ACOSS, one of Europe’s largest non-sovereign CP issuers.

Spain enjoyed enormous demand for a 10 year syndicated bond on Tuesday, with an order book which was almost double the previous record for a single tranche euro public sector benchmark. Bankers away from the deal said investors were attracted by the big new issue premium on offer.

Europe's equity capital market bankers are expecting a resurgence of secondary share sales by investors over the coming weeks as financial sponsors look to take advantage of the rebound in global equity markets since the start of the pandemic to raise cash to redeploy elsewhere.

Some bank treasury teams are weighing up whether to access the primary market ahead of first quarter results, with bankers suggesting they could take advantage of growing demand amid falling supply.

The Republic of Hungary has mandated a consortium of banks to lead a dual tranche bond issue in euros. The government's debt management body has increased its foreign currency issuance limits as a result of the spread of Covid-19.

Ireland’s National Treasury Management Agency (NTMA) has increased its funding programme for the year by €10bn following measures announced by the government to counter the impact of the coronavirus pandemic.

Analysts have praised UniCredit for taking a conservative approach to dealing with the coronavirus pandemic, after the Italian bank said on Wednesday that it would be making higher loan losses provisions in the first quarter than had been expected by the market.

One of the co-heads of the London Group of Tradition, the interdealer broker that is one of the largest in the over-the-counter derivatives market, is leaving the firm.

Mortgage payment holidays and falling residential and commercial real estate prices will likely lead to a deterioration in the credit quality of the collateral pools securing covered bonds. But those programmes have other protective measures that will keep investors well insulated. And, if they need more protection, issuers can easily assuage their and rating agency concerns by adding collateral.

Financial institutions with funding needs that are holding off in anticipation of better issuance conditions are doing it wrong. Waiting until the other side of earnings season to bring deals will likely prove a mistake.

Canadian banks should be applauded for funding themselves in public with deals bought by real investors in a range of currencies at actual market clearing levels — astonishing though that may be for the many entitled European issuers that have shamelessly become accustomed to central bank funding.

Any concerns over Italy’s market access were vanquished on Tuesday when the sovereign received €110bn of orders for a dual tranche bond syndication, allowing it to raise €16bn as it makes inroads into its enlarged funding task in response to the coronavirus pandemic.