Germany

Deutsche Hypo, Erste Group and Credit Agricole SCF have mandated leads for covered bonds that are all expected to carry negative yields.

A transparent pricing approach was integral to the success on Tuesday of UniCredit AG’s (HVB) five year Pfandbrief, which was launched with a deeply negative yield.

The European IPO market has been reopened with the listings of TeamViewer, the German remote access software provider, and Swedish private equity house EQT. However, with investors continuing to position more defensively bankers expect valuation pressure to remain.

Two near-investment grade industrials made a splash in the high yield bond market on Monday, with both Smurfit Kappa and Thyssenkrupp getting their order books oversubscribed multiple times.

Continental, the German car parts company, is still committed to its plan to spin off its powertrain division, despite postponing the IPO earlier this year due to volatility caused by the escalating trade war between the US and China.

Issuance is starting to resume after the summer break; however, this week a booming public market drew away investor and issuer attention from MTNs. Despite this, a range of established SSA, FIG and corporate borrowers have slipped in, with deals across core, niche and EM currencies.

After two huge days of corporate bond issuance, Thursday was much quieter, with issues only from Vier Gas Transport and SBB Norden — not because the market was worse, but just because most of the issuers that wanted to come this week had crowded into the first two days.

A pair of European agencies placed taps at the long end of the Kangaroo curve this week, printing at the nine and 12 year points. Yields on these notes have fallen compared to previous taps, as the Kangaroo market feels the effects of a global bond rally.

Some traditional arrangers of Schuldscheine, which see themselves as the guardians of the market’s probity, were horrified by the news that Pareto Securities is looking to set up shop on their front lawn. But the sort of companies Pareto is likely to bring will answer the prayers of some investors that the old guard have not. And with it, buyers will have to take greater responsibility for what they stick on their books.

Guarantor: Federal Republic of Germany

Deutsche Pfandbriefbank was marketing a five year senior preferred bond in the euro market on Thursday. The deal was launched at a spread unmoved from price thoughts, with order books only €125m larger than the deal size.

Subway operator Tianjin Rail Transit Group has raised a €200m Schuldschein loan, becoming the first Chinese company to tap this market. Bankers believe similar deals will follow, given the market’s appeal.