Europe

The European Central Bank has been buying Italian government paper well above the pace indicated by the capital key, but has still struggled to keep the beleaguered sovereign’s spread to Bunds in check.

The European Central Bank is encouraging investment banks to keep up their market making activities during the coronavirus pandemic by offering them temporary relief on their capital requirements for market risk.

Having recently completed a series of investor meetings, and armed with an Aa1 rating from Moody's, Bluestep Bank will soon print the first Swedish covered bond secured on near-prime mortgages. The transaction emerges as aggressive quantitative easing by the Riksbank has resulted in a considerable tightening of covered bond spreads.

Governments in developed countries have rushed to introduce measures to support companies, large and small, battling with the effects of coronavirus lockdowns. But they are all doing it differently, throwing a spotlight on the relationships between public and private sectors in each country and inviting the question: which is the gold standard? Jon Hay, Silas Brown and Mariam Meskin report.

English football’s highest level is at a clinch point as teams juggle a plunge in revenue, due to the suspension of the Premier League season, and the hefty overheads of player wages they must continue to pay. With clubs in need of cash, viable options are proving few and far between. Silas Brown, Sam Kerr and Mariam Meskin investigate.

High quality Yankee issuers showed their spirit of adventure by printing front-end trades this week, returning to a part of the curve that has been starved of supply since the start of the coronavirus crisis.

Rating: —/BBB/BBB

German chemicals and consumer goods firm Henkel cleaned up in Swissies after a 24 year absence this week, while local company SGS ventured out further along the maturity curve.

BNP Paribas and Crédit Agricole enjoyed the best of conditions as they reopened the market for non-preferred senior bonds from eurozone banks this week, but Société Générale ran into market turbulence when it emerged a day later. Bankers said that showed that demand for the instrument remains limited.

Italian government bonds sold off sharply this week as worries grew over the sovereign’s debt sustainability after last week’s Eurogroup meeting left any form of debt mutualisation a highly unlikely prospect in the near term. The result is that Italy will have to rely more on support from the European Central Bank as it prepares to bolt on a much bigger borrowing programme in response to the coronavirus pandemic.

Bank of Italy officials said this week that the country’s most fragile financial institutions might struggle to cope with the economic impact of the coronavirus pandemic, raising the prospect of consolidation within the banking sector.

Informa, the UK publishing and events company, has taken the decision to suspend its dividend and raise £1bn of fresh equity after the Covid-19 pandemic caused hundreds of its conferences to be postponed.