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Conducive credit markets and tight spreads to lure issuers as risks loom on the horizon
Yankee deals range from subordinated debt debuts to super long senior extensions
◆ Steady demand thanks to improved investor perception ◆ Deal pays high single digit premium... ◆ ... but becomes issuer's tightest unsecured issue for many years
Data
Contrasting investor receptions in euro and sterling markets but new issue premiums rise in both
Observers blame slower bookbuilding on deal-specific factors but others see warning shots for whole market
Covered market provides 'the deepest pocket of demand' among FIG asset classes
Capital deals and a tight Nordic senior print point to what lies ahead for issuers
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Demand for covered bonds issued on Wednesday by Deutsche Kreditbank (DKB) and BPCE exploded towards the final hour of book building, as the European Central Bank placed crushingly large orders for the deals. Even though the granularity of the order books was good on this occasion, the central bank’s larger than expected presence was expected to displace real investors. -
There is a growing pipeline of subordinated bond issuance in the FIG market this week, as issuers think about their regulatory requirements and find no reason to wait in light of a recently favoruable backdrop.
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Deutsche Bank posted declines in investment bank revenue on the back of a fixed income trading fall in its third quarter results, released on Wednesday. But debt origination revenue grew. A change in the bank’s reporting structure to reflect its new capital release unit has allowed it to shield the investment bank from costly losses on unwanted assets.
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Restructuring costs led Deutsche Bank to a net loss of €832m in the third quarter of the year, leading investors to doubt the potential for reliable performance in the issuer’s fixed income securities.
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The inertia dragging on financial markets’ response to climate change is brought home by an opinion poll in the UK, published on Wednesday. When asked questions in the survey, about 60% of people say financial institutions and banks should no longer invest in fossil fuels. Yet Shell and BP are still the first and third biggest stocks in the FTSE 100.
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Deutsche Bank plans to sell a structured conditional pass-through (CPT) covered bond that is packed with commercial mortgages and has a double-A rating. The collateral-efficient funding makes perfect sense for the issuer and, in a negative yield environment, it could also potentially be interesting for certain investors.
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Bond market's leading performers recognised at GlobalCapital's annual awards ceremony
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The winning institutions and individuals will be revealed at the awards dinner on June 17 in London
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