Europe

Swiss franc bond spreads have failed to tighten as much as they have in the euro market, and the lack of price action meant few issuers ventured out this week. A trio of domestic deals comprised the only new supply.

The European Investment Bank and the Region of Madrid stood out in the public sector bond market this week, with the former achieving its biggest ever order book for a euro benchmark.

The European Commission’s plans for a recovery fund will not be enough to prevent Italy’s public finances suffering a severe fiscal deterioration said Fitch, after the ratings agency downgraded the sovereign on Tuesday night.

UK pub chain JD Wetherspoon has sold £141m of fresh equity to keep itself afloat until the UK government lifts the country’s lockdown, which led to the closure of all pubs.

Equities have made a stirring recovery since the record coronavirus sell-off in March. Corporates, looking to raise cash by any means necessary to survive the crisis and lower their risk, have taken advantage of the uplift, selling non-core equity holdings. Now, more are being urged to get in on the trade while it lasts, as there are fears that stock markets will plummet again if lockdowns or infections worsen with the pandemic far from over, writes Sam Kerr.

Deutsche Bank has regained its number one spot in its home market, but it was its traditional investment banking business that shone rather than investments made as part of the firm’s new Germany-focused strategy, writes David Rothnie.

Hargreaves Lansdown fell in trading on Thursday after Stephen Lansdown, one of the co-founders of the UK retail investment platform, sold £160m of shares in the company via an accelerated bookbuild led by Barclays.

The German state of North Rhine-Westphalia made its first visit to the offshore renminbi market earlier this week, continuing this year’s SSA dim sum shopping spree.

Pension Insurance Corp was almost 12 times subscribed for a new tier two capital bond on Thursday, after following some of its UK peers into the sterling market amid a busy pipeline for new pension risk transfer deals.

Recently issued Canadian covered bonds have posted among the strongest performances in the covered bond market and still look cheap relative to Nordic deals, said traders on Wednesday. Based on Markit’s iBoxx covered bond indices, a range of other markets, such as Australia and the UK, also look very cheap, but offers are much harder to find.

The funding needs of Spain’s regions are expected to rise this year. The coronavirus pandemic is stretching healthcare resources, which are funded at a regional level, and will require financing, according to debt capital markets bankers.

Market participants argued that the European Commission could have gone further this week to ease leverage ratio constraints on banks during the coronavirus crisis.