Europe

Hedge funds are showing up in greater numbers in order books for agency bonds, attracted by the strong performance and elevated spreads available in the SSA asset class.

BMO Capital Markets lead managed its first ever sterling public sector bond issue this week, with an under the radar tap for Rentenbank.

Rating: Aaa/AAA

German agency L-Bank steamed into the dim sum bond market on Tuesday to print what could be the start of a new flurry of offshore renminbi issuance.

Vesuvius, the UK listed ceramics engineer, is marketing a US private placement, according to market sources.

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

Gilt market participants are expecting UK government borrowing to explode to close to £300bn this year. However, despite the huge supply, the Bank of England’s buying programme will prove even bigger and maintain price tension. To further ease the strain on cashflows, the Bank of England is expanding its Ways and Means Facility for the short-term.

Supermarket Income Reit, the UK real estate investment trust focused on supermarkets, has unveiled a £75m fundraising to finance new investment opportunities that may arise from the Covid-19 crisis, which had caused UK grocers to be inundated with demand.

The Single Resolution Board will take what it describes as a "forward looking" approach with banks that might struggle to meet their minimum requirements for own funds and eligible liabilities (MREL), though it will also be sticking to its original deadlines for these targets.

Rating agency Fitch says that the bleak economic outlook has exposed many of Germany’s banks’ weaknesses, prompting it to take action on the ratings of many of them. Deutsche Bank could become one of Europe’s banks most affected by the recession.

After a run of sovereign issuance, emerging market investors got their first taste of corporate paper since the Covid-19 coronavirus crisis struck bond markets.

Official financial lifelines to keep UK companies alive through the coronavirus pandemic are already having a tangible effect. Shares in Redrow, the UK housebuilder, rose 7.5% on Thursday morning after it announced it had been approved to borrow up to £300m from the Bank of England’s commercial paper facility for investment grade companies.