Germany

Investors jumped on the opportunity to buy euro bonds with a positive yield in the public sector market this week as KfW and Kommunalbanken sold 15 and 10 year bonds respectively, with the latter returning to the currency for a benchmark for the first time since 2017.

Mann+Hummel struggles in Schuldschein market amid splurge in auto trades — Bureau Veritas returns to USPP market — Seplat turns to loans for Eland buy — Endava swaps to syndicated sterling borrowing — Bravida refis revolver, eyes more buys

Europe’s equity-linked bond market has been rocked this week, this time by fresh allegations of accounting fraud against Wirecard, the German payments processing company, less than a month after SoftBank issued a €900m exchangeable bond designed to derisk its investment in the company. Aidan Gregory reports.

German agency KfW revisited the Norwegian krone market yet again on Tuesday to place its 15th trade of the year in the currency. The deal brings KfW’s Nokkie issuance up to a record Nkr17bn ($1.9bn) for the year to date, according to Dealogic, Nkr250m more than its previous 2011 record.

Three covered bond issuers took advantage of a rise in yields, following what seemed a breakthrough in Brexit negotiations, to issue transactions that would not have been well received two weeks ago. Banca Popolare dell’Alto Adige’s debut and Sparkasse Hannover’s sub-benchmark deals delivered positive returns, while demand for a slightly negative-yielding benchmark from Sparebanken Sør Boligkreditt was boosted by its green credentials.

Mann+Hummel, a veteran borrower in the Schuldschein market, struggled to place a Schuldschein, according to market sources, with participants citing ZF Friedrichshafen’s blockbuster transaction as well as the market’s over-indulgence in the auto sector this year as chief reasons.

Investors pounced on the opportunity to buy a bond with a positive yield in the euro market by KfW on Tuesday. Elsewhere, the Asian Development Bank drew strong demand to sell its biggest ever green bond in euros following its debut in 2018.

German property developer Garbe Industrial Real Estate has postponed the IPO of Logistrial, its logistical properties unit, according to three sources familiar with the matter.

Rating: Aa1/AA/AAA

The branding may be on the way out, but there are plenty of reasons to be encouraged about the potential for real progress in the next phase of the Capital Markets Union.

The Schuldschein market has for many centuries attracted buy-and-hold investors, but this may change as some arranging banks are offering lenders opportunities to buy sections of their own Schuldschein positions. But many fear that the whiff of secondary markets will see regulators reclassify the instrument as a security, instead of a loan.

German tyre manufacturer Continental rolled into the market on Wednesday, one week after it priced its debut floater in the MTN market last week. The manufacturer had enjoyed several years away from the capital markets, before returning in September with a series of public deals. Elsewhere, political events in Turkey have left lira issuance surrounded in “uncertainty.”