France

Unédic, the French unemployment agency, will have a substantially bigger funding programme for 2020 in response to the coronavirus pandemic, according to its chief financial officer, Jun Dumolard.

BPCE took advantage of the improvement in credit sentiment to issue a €1bn five year covered bond on Tuesday. The deal attracted a granular order book and was priced close to where it would have been expected to come in light of recent Canadian deals — 20bp above theoretical fair value.

Bankers in Paris are adjusting to a new life of lockdown following president Emmanuel Macron’s declaration of war against Covid-19 on Monday, which has led to the toughest restrictions being imposed on daily life in France since the Second World War.

AXA Bank successfully issued the first covered bond eligible for the European Central Bank’s newly established €750m Pandemic Emergency Purchase Programme (PEPP) on Thursday. But, despite the ECB’s much increased firepower, the bonds still offered a pick up of around 30bp and the funding would barely been possible without the central bank's support.

Governments across Europe are scrambling to support businesses as the rapid spread of the coronavirus batters their economies. In France, the state is in discussion with its advisors about preparing to step in and take equity stakes in companies showing signs of stress, according to sources speaking to GlobalCapital.

Caisse des Dépôts et Consignations plans to proceed with funding outside of its core currencies of euros and dollars in the coming months, in spite of the volatility.

This week's funding scorecard looks at the progress French agencies have made in their funding programmes by mid-March.

Once again, corporate bond markets have staged a recovery after a shutdown of several days as asset prices plummeted in response to the growing coronavirus outbreak. Three industrial companies plus JP Morgan issued bonds in the US on Tuesday, which “all went exceptionally well” according to a head of syndicate in London. Danone launched on Wednesday the first euro corporate issue of the week, paying a high spread but small new issue premium.

Korian, a French owner and operator of care homes, issued a new €400m seven year convertible bond on Tuesday, as equities rallied on hopes of central bank stimulus to combat the economic cost of the Covid-19 corona virus outbreak.

Nacon, the French video game developer, concluded its listing on the Paris stock exchange last Friday, a week earlier than expected. A strong start to the bookbuilding process meant the banks were able to price the deal despite a brutal equity market sell-off, but the seller was careful in allocations to try and aid aftermarket performance.

Rating: Aa2/—/AA

Unédic was almost three times covered for a 10 year bond on Thursday, with the leads pointing to the relative value of the trade and the quality of name as the factors behind its success against a difficult market backdrop.