Germany

Two public sector borrowers managed to get euro deals done in the primary market ahead of the European Central Bank’s governing council meeting on Thursday, with World Bank issuing its biggest ever bond in euros longer than 10 years and Hamburg comfortably crossing the line despite an embarrassing start to the execution process.

The City of Hamburg began taking indications of interest with initial price thoughts for a 30 year bond on Wednesday afternoon ahead of schedule after one of the leads accidentally sent out a message announcing the official opening of order books.

The European bond market has lost none of its charm or interest, said one of its most experienced bankers this week, on the verge of his retirement. Hugh Carter, Commerzbank’s head of credit syndicate, is leaving the bank on September 18.

The Schuldschein market, which has spent the last few years growing increasingly international compared to its domestic origins in Germany, has lost its adventurous streak due to the coronavirus pandemic. Forays into unknown territories with borrowers from new industries are being treated with trepidation and lenders are heading back to what they know best.

Commerzbank did not pay a premium to launch its new additional tier one (AT1) this week, as it found strong demand at the long end of the curve. The bank was returning to the market just three months after its last deal in the format.

Hensoldt, the German sensor maker that supplies the defence industry, has joined Europe’s burgeoning IPO pipeline with the announcement of a Frankfurt listing this year. The deal, launched on Tuesday, is already gaining traction among investors, who are seeking to meet the company for what could be the largest German IPO of 2020.

French agency Caisse des Dépôts et Consignations (CDC) hit screens on Monday afternoon with its second ever sustainability bond, following its debut in the format last year.

DZ Hyp priced a well-subscribed €1bn five year Pfandbrief on Monday through fair value and with the largest negative yield of any covered bond issued this year. The syndication is strong encouragement for hesitant issuers considering deals in this tenor, where yields are at their most punitive.

Tatjana Greil Castro has been promoted to co-head of public markets at Muzinich an investor in corporate credit.

German real estate company Vonovia priced a €1bn accelerated capital raise on Thursday to take advantage of possible growth opportunities arising from the Covid-19 pandemic. The deal was covered quickly and attracted enough demand to cover the transaction several times but execution was made complicated by a sell-off in US tech stocks on Thursday evening.

Rating: Aaa/AAA/AAA

Once Schuldschein market darlings, auto parts suppliers are beginning to look to lenders like they may be in distress. Some fear a wave of credit restructurings on the horizon, when the market's lean documentation standards are likely to be tested.