Europe

Bank bondholders should feel pretty good about the challenges facing the financial sector heading into the new decade.

Credit fund money is flooding into UK companies, despite a shaky economy and prolonged uncertainty surrounding the country’s exit from the EU. Less popular markets such as the Nordics present expansion opportunities, but the UK has consistently been the top location for private debt deals.

Covered bond spreads were holding steady on Thursday as bank traders lighten their balance sheets amid modest secondary market buying from the European Central Bank (ECB), ahead of Crédit Agricole and Nordea’s inaugural green transactions and Raiffeisen Bank International’s vanilla debut.

Bart Schmeetz is to become ING’s global head of financial markets, replacing Percy Rueber, who is leading efforts to build a trading platform at the Dutch bank.

Schuldschein salespeople, ever on the hunt for new investors with deep pockets, are targeting institutions with environmental, social and governance (ESG) portfolios as the trend for green deals flourishes.

The European Central Bank has warned that small banks are falling behind their larger peers as they look to build up buffers for the minimum requirements for own funds and eligible liabilities (MREL), despite operating in advantageous market conditions this year.

Financial institutions bond bankers expect that new deal flow will come to a standstill in the primary market at the end of next week, as investors close the lid on an agreeable year for returns.

Rentenbank raised €1bn of 10 year cash on Wednesday. The deal did not reach full subscription and the leads were unable tighten the spread from guidance, thanks to a rates sell-off affecting demand from Asia.

Dechra Pharmaceuticals, the UK veterinary pharmaceuticals company, has sold euro and dollar US private placement notes, in a debut widely seen as a success.

Caisse de Refinancement de l’Habitat (CRH) returned to the covered bond market on Wednesday to issue a €1bn seven year covered bond, but attracted €1.4bn less demand than for its €1bn 10 year, issued in October.

CNP Assurances won healthy demand for a green tier two capital bond issue this week, as insurance companies begin to embrace the idea of printing capital instruments as socially responsible investments.

The last few SSA issuers are making their way to market despite a sell-off in risk assets based on rumblings of further tariffs between the US and China and a European Central Bank report showing increased threats to global financial stability.