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◆ Friday Italian capital raising completed ahead of potential big issuance next week ◆ Strong market tone drives rise in AT1 bids ◆ Bank marches inside 300bp reset but also through recent Commerzbank spread
◆ Unusually busy Friday for European bank funding ◆ Small premium, large demand ◆ Meanwhile 10 year OAT-Bund spread breaches 100bp
◆ Larger-than-usual size ◆ Constructive Friday opening led to three well-received FIG trades ◆ ...of which Alpha may have paid the least NIP
Data
Conducive credit markets and tight spreads to lure issuers as risks loom on the horizon
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
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Toronto Dominion took advantage of strong demand on Monday to issue a $1.75bn three year covered bond, which was priced almost flat fair value. -
DZ Hyp managed to build a substantial book in little time on Tuesday for its second 10 year Pfandbrief of the year, with demand fortunately swelled by an overnight rise in yields.
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Italian banks have been in the spotlight recently and Mediobanca on Tuesday was the fifth bank to tap the euro market in the past two weeks, after UniCredit, Intesa Sanpaolo, Banca Monte dei Paschi di Siena and UBI Banca. It attracted demand of more than three times the deal’s size of €500m.
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The Australian Prudential Regulation Authority said on Tuesday that Australia’s largest banks would have to use tier two capital to meet their requirements for loss-absorbing debt capacity. But the new targets will start off lower than previously proposed.
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Barclays’ ex-head of EMEA FIG syndicate John Wright has started a new job at Standard & Poor as financial institutions credit analyst.
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Hong Kong-based Chong Hing Bank raised $400m from a Basel III-compliant additional tier one (AT1) transaction at a level that was, unsurprisingly, inside fair value.
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