Europe

European banks are steering well clear of new issue markets during the coronavirus pandemic, avoiding having to call on investors for funding by taking advantage of attractive central bank funding schemes.

Aareal Bank has become the latest European financial institution to extend the life of an additional tier one instrument, as turbulent market conditions make it harder for banks to decide how to manage their capital structures.

The Nordic region’s credit markets are experiencing something of a lockdown as the spread of Covid-19 lead to dozens of fund providers halting withdrawals last week and the effective closure of the primary market due to a shortage of liquidity.

L-Bank postponed its dollar transaction on Thursday after not receiving enough orders for the targeted deal size. The trade had been structured as an auction, with investors invited to place bids over their desired level versus mid-swaps. After taking indications of interest, no further updates followed.

Could EU member states finally come together to issue a common debt instrument? In this article, GlobalCapital takes a look at the key issues.

Despite the terrible effects of the coronavirus pandemic on capital markets, the MTN market is open and functioning.

L-Bank brought a novel approach to sell a two year dollar deal on Thursday that could help other borrowers navigate volatile markets, with investors invited to place bids for the trade over their desired level versus mid-swaps.

Europe's bank funding officials are not certain how their borrowing plans are likely to change but seem agreed there is little point in hitting the primary market until serious liquidity returns, That has given Canada's banks the run of the place with this week with another deal emerging from Canadian Imperial Bank of Commerce on Friday.

The Bank of England said on Friday morning that UK banks should not treat coronavirus-impacted exposures as impaired assets under IFRS 9 accounting standards, as it unveiled new guidance around the impact of the pandemic.

Hotel Chocolat, the UK chocolatier and retailer, sold 9.77m new shares after revealing that its revenues in March have been damaged by the Covid-19 coronavirus; the company hopes the capital will give it flexibility in the weeks and months ahead. More UK SMEs will no doubt follow it to market over the next few weeks.

Corporate funding markets have been thrown into turmoil faster than anyone can remember by the aggressive onslaught of the coronavirus and government measures to put society in emergency shutdown. Borrowing costs have soared for all firms, but markets are not closed. As Jon Hay, David Rothnie and Silas Brown report, the coming weeks will sort those that can still raise cash from those that need rescuing.

Central banks attacked the coronavirus threat this week, promising swathes of new money on an unprecedented scale to help fund governments’ colossal new fiscal commitments. Bond markets reacted with relief to the swathe of multi-billion programmes aimed at fending off global financial meltdown.