Europe

Equity capital markets bankers were celebrating a rare piece of good macroeconomic news on Wednesday morning: the surprise surge of former US vice-president Joe Biden in his bid to win the Democratic nomination to be presidential candidate in November’s election.

Banco BPM unveiled an ambitious new strategic plan this week, accounting for the potential impact of Covid-19 in northern Italy. The bank intends to reduce its reliance on the European Central Bank (ECB) for funding and take advantage of regulatory changes allowing additional tier one to be included in Pillar 2 capital requirements.

A €704m share block in German remote software company TeamViewer showed that the equity capital markets are still open for large opportunistic block trades, despite equity market fears over the spread of the Covid-19 coronavirus.

Lloyds Banking Group is giving investors a chance to switch out of a legacy tier two and into a new instrument, without the basic terms of their securities changing.

The US Federal Reserve’s emergency 50bp cut in interest rates on Tuesday failed to reassure markets. The US and European response to the Covid-19 coronavirus outbreak needs to incorporate targeted fiscal policy as well.

The World Bank and Assicurazioni Generali are each giving the insurance-linked securities (ILS) they issue a sustainability label, as the market attempts to burnish its credentials for investors concerned with environmental, social and governance (ESG) criteria. Both issuers are imitating conventional green bond programmes by focusing on direct use of proceeds, but there are also debates around issues such as freed-up insurance capital and what governments do with funds released from catastrophe bonds.

GTLK Europe, an air and sea vehicle lessor, has priced a seven year unsecured bond — its longest dated deal to date. It paid a premium to investors, but won praise for steering the transaction through a market that had recently been shuttered due to Covid-19 chaos.

Novo Banco has requested a capital injection of €1.037bn, much of which will be sourced from the Portuguese state. This shines a bad light on European banking regulators and their mandates.

Equity capital markets bankers are preparing block trades for launch this week, following a big bounce in stocks on Monday. Banks are working hard to try to bring the transactions to the market while they can, in what they sense might be a short issuance window.

Korian, a French owner and operator of care homes, issued a new €400m seven year convertible bond on Tuesday, as equities rallied on hopes of central bank stimulus to combat the economic cost of the Covid-19 corona virus outbreak.

Two German states rebooted the primary SSA market on Tuesday with intraday deals at the opposite ends of the euro curve. The five year deal was almost two times covered but there were no book updates for the 15 year.

German auto and industrial supplier Schaeffler has launched an inaugural Schuldschein. The funds will be used in accordance with its green finance framework.