Europe

Surprisingly buoyant market conditions mean that next week could be wide open for business instead of sinking into a post-Thanksgiving lull, said financial institutions DCM bankers.

Virgin Money revealed in a presentation on Thursday that its cost of funding had risen by 31bp in the last year, as the UK lender looks to replace central bank money with financing from the capital markets.

Merlin Properties, the Spanish real estate investment trust, launched on Wednesday a €500m no-grow 15 year benchmark bond, rated Baa2/BBB, with a positive outlook from S&P Global.

After a day of global investor calls on Tuesday, Gas Networks Ireland and Radiotelevisione Italiana (Rai) launched sub-benchmark bonds on Wednesday morning. That followed a deal by Tamburi Investment Partners on Tuesday.

Aircraft leasing and aviation services company Avia Solutions Group became the latest debutant in the European high yield bond market on Tuesday. Central bank monetary policy has eased the path for a number of debuts in the last couple of weeks.

Senior managers and former employees of Future plc, one of the best performing companies on the London stockmarket, have sold £43.7m of stock in the company, via an accelerated bookbuild.

Crédit Agricole and Santander raised a combined €3bn of 10 year covered bond funding on Wednesday, with joint demand of over €5bn. Both deals were special in their own right, with the Spanish deal paying a rare double digit spread over mid-swaps, while the French borrower’s inaugural green transaction will have drawn a rich new seam of demand from buyers with a green investment mandate.

Intesa Sanpaolo and BNP Paribas hurried to make use of strong market conditions this week, building blowout order books for a pair of new senior deals in socially responsible formats.

Key Schuldschein arrangers that have long felt uncomfortable with floors at 0% for fixed and floating rate notes are gearing up to bring more borrowers to market with a Euribor floor set below zero in the new year.

Commerzbank was careful to leave a bit of premium on the table for investors on Wednesday, as it took home €500m of seven year funding ahead of the Thanksgiving holiday in the US.

Covered bond investors have had a stellar year but are unlikely to match that performance in 2020. They will be relying upon healthy new issue premiums and a steady supply of higher yielding, non-standard deals to stand a chance of making good returns.

Bank of Nova Scotia returned to the sterling market for the first time in more than a year on Wednesday, when it sold its first total loss-absorbing capacity (TLAC) compliant senior bonds in the currency a day after reporting its full year results.