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FIG MTNs and CP

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  • Second tier banks and corporations will launch commercial paper programmes if the European Central Bank takes its deposit rate into negative territory on Thursday, predict dealers.
  • The European Central Bank moved its deposit rate into negative territory on Thursday. Such a move is unlikely to boost lending to the real economy, and could come with unintended consequences for the money markets.
  • Nationwide has fired up the MTN printing press and is looking to do more business over the next couple of weeks having priced its first such deal in two years last week, according to bankers. But they warn that the issuer may need to widen its levels to attract investors.
  • Money market funds snapped up two year paper from ABN Amro this week almost immediately after the bank came out of earnings blackout.
  • Issuers have started to respond to a shift in asset allocation approaches from money market funds, with highly rated borrowers selling sub-one year covered notes and lower rated names contemplating entering the commercial paper market.
  • European money market funds are beginning to buy covered bonds in the secondary market, according to analysts. Issuers are eager to tap the new investor base and are designing deals to suit the investors.