France

The Conservative UK government may be undermining London’s status as Europe’s pre-eminent financial hub with its seeming determination for a clean/hard/sharp/solid Brexit, but potentially more momentous events across the Channel could soon see financiers flocking in the other direction.

The race for the French presidency has put pressure on the country’s government bonds (OATs), prompting price moves which could have far-reaching consequences for both covered bond issuers and public sector borrowers. Lewis McLellan reports.

The Green Bond Principles could be adapted to include clarification on the types of assets eligible for financing from the market, according to a sustainability consultant at Vigeo Eiris. The topic has grown in importance after France’s debut sovereign green bond last week included intangible assets among its use of proceeds.

Many market commentators have commented that 2017 will be the year of political risk. Uncertainty around Brexit, Donald Trump’s inaugural year as US president and a series of elections in continental Europe make conditions ripe for bouts of volatility.

The relentless rise in French government bond yields this year has started to disrupt demand for French covered bonds, a trend which will hold until at least May when the country’s presidential elections are over.

The European IPO market is getting busier, with several deals launched this week, and another close to being priced.

French agency Caisse des Dépôts et Consignations is set to follow its sovereign by bringing a debut green bond syndication in 2017, after hiring banks on Thursday to run a roadshow for the potential trade.

Natixis has added another banker to its bond syndicate desk in Paris, to cover corporate bonds.

UniCredit has made three senior appointments in Asia, including to its management in Singapore and Mumbai, as well as hiring Florence Blazy as a senior banker in France.

Crédit Mutuel Arkéa found strong demand for a €500m 12 year tier two on Wednesday, as investors showed their appetite for a product that could become a rarer sight in 2017.

Crédit Mutuel CIC on Tuesday became the first French covered bond borrower to begin and finish pricing at a spread that was markedly through OATs in this part of the curve, but the deal was a smaller size than expected.

French supermarket chain Auchan Holding on Tuesday came to the bond market for the first time since Standard & Poor’s downgraded its ratings from A- to BBB+ in April, but demand for the credit was said to be “bullish”.