Germany

The Schuldschein market is touching records for overall volume and number of deals in 2019, and in any normal year that would be what excites the market most. But instead, most pride comes from the progress made in Asia as well as innovations in sustainable financing

Volumes in European leveraged finance took a dive in 2019, leaving leveraged credit investors struggling to find value. A string of take-private attempts, especially in Germany, had lenders and banker salivating, but fell apart before coming to market

KfW has announced a smaller borrowing programme for next year, joining a number of other public sector borrowers also set to borrow less in 2020.

Analysts at Commerzbank have criticised Markit for excluding Deutsche Bank’s innovative conditional passthrough covered bond from the iBoxx index for covered bonds. They believe the decision is “technically difficult to justify” and could discourage other banks from embracing new formats.

Schuldschein salespeople, hunting for new investors with deep pockets, are targeting institutions with environmental, social and governance portfolios as the trend for green deals flourishes.

German banks have completed the first Schuldschein issue with an independent counterparty on the new Finledger blockchain platform. The entire transaction happened on a paperless basis.

BlackRock is bearish on the prospects of the government bond market in 2020, thanks to the exhaustion of monetary policy as a means of generating growth. Instead, the world’s largest asset manager is looking to move deeper into riskier assets such as emerging markets where there is still room for further easing.

Christian Berendes will head up Deutsche Bank’s government and regulatory affairs department from next year, after being promoted internally.

The European Commission will allow a group of public institutions in Germany to inject €2.8bn of capital into the troubled German lender NordLB, after finding that its recapitalisation plans conformed to EU rules on state aid.

As a nascent feature of the Schuldschein market, secondary trading still hasn’t developed market norms and many remain unclear about the process.

Gewobag, the A2/A+ rated German housing company, launched the first Schuldschein with a Euribor floor set below zero in November and the transaction has closed at €650m, according to a source close to the deal. The success of this deal will encourage arrangers to bring more companies to market with negative floors in 2020.

Montana Tech Components has monetised a small chunk of its stake in Varta AG, the German micro battery maker, ahead of the company’s inclusion in the MDAX, Germany’s midcap benchmark index.