France

BFCM

Five issuers from core Europe priced covered bonds this week but the standout success, which could have been priced without the European Central Bank’s help, was the first Austrian deal of the year from Erste Bank.

Plans to create a new tier of debt in France has put minds at ease about the status of existing senior bonds, bolstering their performance and clearing the way for what could be a very busy year for French banks.

If European credit investors had to name two firms damaged by the precipitous fall in commodity prices, it is likely that Glencore and Anglo American would top the poll.

Investors in the public high yield bond market have gone right off riskier structures such as payment-in-kind notes, only two months after they eagerly grabbed a €1.1bn PIK deal for ICBPI, one of the biggest of its kind.

Additional tier one paper (AT1) from Intesa Sanpaolo and Crédit Agricole was holding firm in secondary on Thursday, despite global equities flashing red again, and bankers feel a lack of fast money is helping the asset class.

Citigroup has on Wednesday night launched the first European equity block trade of the week, selling 12m shares in Elior, the French catering company, for about €212m.

Banque Fédérative du Crédit Mutuel has come to market with 2016's largest medium term note (MTN) so far.

La Financière Atalian, the French facilities management company, priced on Tuesday the first European high yield issue of the year. The €125m tap was increased to €150m.

With only one small tap launched so far in Europe's high yield bond market this year, investors are disappointed with the scarcity of deals in the pipeline.

Poor liquidity in the additional tier one market could keep new issue premiums in the product high for some time to come, according to some FIG bankers, who saw Crédit Agricole seek the depth of the dollar market again on Tuesday.

Atalian Global, the French facilities management company, on Monday opened the first roadshow of 2016 for a high yield bond in Europe, as it announced the acquisition of US peer Temco Facility Services.