France

Danish Ships Finance, Natixis Pfandbriefbank and Raiffeisen Bank International will keep the primary market busy with deals and roadshows this week. But the main focus will be on the size and spread that Deutsche Bank achieves for its innovative debut structured conditional pass through (CPT) covered bond that will be launched imminently.

La Banque Postale is looking to strengthen its capital position with a new additional tier one bond, beginning investor meetings on Friday. The issuer joins a growing trend towards issuers employing six month par call options in their perpetual securities.

Covered bond market participants expressed surprise at the sluggishness of book updates on Credit Mutuel Arkéa’s debut public sector covered bond, issued on Thursday morning. But the deal ended up more than twice subscribed with a great deal of smaller orders and little price sensitivity in the book.

Société Générale reported a slump in overall profit as part of its third quarter results on Wednesday, but was keen to draw attention to a near-50bp improvement in its capital ratios, thanks to restructuring actions.

Caffil issued the tightest French 10 year of 2019 amid a flurry of other well received covered bonds issued on Tuesday by DZ Hyp, mBank and Santander UK. While the European Central Bank’s return to the market helped deals go well, it was not needed amid an improvement in risk appetite.

Spanish paper company Lecta moved closer to its restructuring on Friday, as the majority of its bondholders signed a lock-up agreement to swap debt for equity. The deal replaces €600m of 2022 and 2023 notes with new senior and junior notes and equity in the company.

French shopping centre operator Carmila visited the MTN market for the first time on Monday, 18 months after it last sold a bond via syndication. Rare issuer Toyota Industries Finance International returned to private placements at the end of last week to place its second euro floating rate MTN of the year.

The holding company of the Bolloré billionaire family is planning to issue an unspecified amount of unsecured notes. Their largest investment, a 26% stake in media giant Vivendi, will be excluded from some of the covenants designed to protect the investors.

Atos, the French IT services and consulting company, has reduced its exposure to Worldline via an intricate transaction involving a share sale, an exchangeable bond and a private placement of stock. In addition to the sale of shares owned by Atos, SIX Group entered into a collar transaction to hedge its exposure in Worldline.

Demand for covered bonds issued on Wednesday by Deutsche Kreditbank (DKB) and BPCE exploded towards the final hour of book building, as the European Central Bank placed crushingly large orders for the deals. Even though the granularity of the order books was good on this occasion, the central bank’s larger than expected presence was expected to displace real investors.

The IPOs of Française des Jeux, the operator of the French national lottery, and DNEG, the UK special effects company, are both gaining strong traction among IPO investors hoping for a strong finish to 2019.

Sparebank 1 Boligkreditt (Spabol) took advantage of positive swap yields to issue a well-subscribed €1bn 10 year this week. Danmarks Skibskredit and mBank are likely to follow soon, having each mandated lead managers for covered bond roadshows.