France

Crédit Mutuel Home Loan SFH followed Crédit Agricole SFH and BPCE on Thursday with a third French five year covered bond, which was priced at an identical spread. Even though the three issuers have raised almost €5bn between them, covered bond volumes are down this year and, with spreads at elevated levels, issuers will have more reason than ever to tap the European Central Bank for funding.

Crédit Agricole jump-started the primary covered bond market on Wednesday with a deal that is hoped will re-establish something of a normal rhythm of issuance.

Some of the largest financial institutions in the eurozone have yet to cancel or postpone their dividend distributions for this year, despite explicit guidance from the European Central Bank urging them to restrict payouts during the coronavirus crisis.

For consistency and execution, Société Générale is GlobalCapital’s best bank for equity capital markets in France and Benelux.

Public sector borrowers returned en masse to the primary bond market this week, with many selling new issues with an explicit focus on providing emergency financing in response to the coronavirus outbreak.

The SSA market appears to be well and truly up and running, with four SSA borrowers hitting screens for new bonds in euros on Thursday, pulling in an impressive €11.5bn with deals from three to 30 years

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.