Germany

The planned takeover of Innogy by E.On and asset swap with RWE creates an unusual, if not unprecedented, situation in the green bond market. Innogy’s €850m green bond, issued last year, will become a liability of E.On, but the windfarm assets to which the proceeds have been allocated will end up with RWE.

Rating: A1/A/A+

With syndicated loan business thin on the ground in EMEA this year, E.On had no trouble achieving a 100% hit rate among its relationship banks, when syndicating the €5bn loan financing for its €20.42bn takeover of Innogy.

The European Central Bank announced on Thursday that it will bring its €2.5tr asset purchase programme to an end in December. However, the assertion that hikes to its deposit rate would not come before September 2019 lent the proceedings a dovish note.

In the political sphere, Europe and North America appear to be travelling in separate directions since the election of Donald Trump as US president in November 2016, as was evident at the recent G7 talks.

German chemicals producer BASF found overwhelming demand for its first sterling corporate bond of 2018 this week. The issuer’s £250m ($330m) offering was more than six times oversubscribed on Thursday, as sterling investors clamoured for a rare non-UK credit.

As Brexit uncertainty kicks in, the clearing arm of German derivatives bourse Eurex has rewarded ten market participants, including HSBC and Barclays, for actively clearing interest rate swaps.

While borrowers crowded into the euro market on Tuesday, investors were reluctant to commit funds only two days ahead of a hotly anticipated European Central Bank meeting.

The Swiss listing of Klingelnberg, the German family-owned gear engineering company, got off to a flying start and was covered across its range within 24 hours of launching the deal.

Senior members of the legal departments at major Schuldschein arranging banks met in Frankfurt on Tuesday morning to discuss ‘baseline’ documentation for market transactions.

E.On has closed syndication of the €5bn loan financing for its €20.42bn takeover of Innogy, as part of the complex three-way deal between those two companies and RWE, which will reposition E.On as a distribution and supply company and RWE as a generator.

SSA borrowers are streaming into the euro market, flooding the early part of the week with deals in an effort to secure funding before a slew of central bank meetings towards the end of the week.