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Gentlemen’s agreements seem like a quaint idea when billions of dollars are up for grabs, yet, bafflingly, the capital markets continue relying on them. It’s time to stop assuming borrowers will blindly do what financiers want when there is a cheaper, easier or more sensible option for treasuries to take. -
Blowout books helped NIBC Bank crank in the pricing by 50bp for its first ever non-preferred senior transaction on Tuesday, with the Dutch lender eyeing a ratings upgrade as a result of its work to build out a stack of debt for the minimum requirement for own funds and eligible liabilities (MREL).
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Banca Carige has sold one of its outstanding covered bonds back into the market as the ailing Italian lender comes into a crucial period for turning its business around and attracting buyout bids.
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The UK’s new Brexit Bond Management Office is still preparing to issue its first notes, originally scheduled for last Friday. The Brexit-themed Gilts are sized at £36.4bn, equivalent to £350m a week over their two year maturity.
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Forget the anti-EU politicians preparing to make gains in the upcoming European Parliament elections. Just as in the eurozone crisis, it is the incumbents holding up reform in the bloc.
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There is nothing wrong with letting banks decide for themselves if refinancing an additional tier one is in their own best interests.
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Participants in the financial institutions bond market were bewildered to see Coventry Building Society paying up to issue a new additional tier one and tender for an old one this week. But the transaction gave other issuers a window into how European rules on bank capital may be applied in practice — something that could pave the way for new and more liberal approaches to calling and refinancing AT1s, writes Tyler Davies.
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The French bank is continuing to execute its plan to become Europe’s leading corporate finance house, despite headwinds and looming consolidation, writes David Rothnie.
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The European Central Bank, as the bank supervisor, has a clear mandate to maintain a bank as a going concern, but that is not necessarily positive for covered bonds. The forthcoming European covered bond directive may help mitigate these concerns — but it is not guaranteed.
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Capital market specialists are good at living with radical uncertainty. Just as banks and investors carried on calmly trading US Treasuries through successive debt ceiling crises, they are now displaying similar sangfroid about Brexit.
