Germany

The leveraged loan market is approaching Christmas on course to beat last year’s issuance, particularly for financing of new buyouts.

Deutsche Pfandbriefbank (PBB) issued an opportunistic £450m three year sterling covered bond on Tuesday. The funding proceeds provided a currency match for the bank’s sterling assets, with the cost being reasonably close to what it could have achieved in euros.

German oil refinery Heide chose one of the high yield market's quietest weeks of the year to fund a €200m dividend to its shareholder. Investors bought it, but some bankers spotted a steep premium in the pricing.

Berlin Hyp (BHH) showed this week that investors are so hungry for short dated covered bonds that they are prepared to pay a negative yield for the privilege of owning them. Even so, it is unlikely that any other issuer will meet this extraordinary demand, writes Bill Thornhill.

Property has been one of the most favoured sectors in the corporate bond market in 2017 and this week saw three more deals. Germany’s TLG Immobilien and Spain’s Inmobiliaria Colonial added €1.2bn to the year’s supply in euros, while UK student accommodation provider Liberty Living sold a £500m ($665.3m) deal.

Crane maker Konecranes raised €150m with a debut Schuldschein on Monday, as the Schuldschein market aims to set a new yearly record.

Guarantor: Federal Republic of Germany

Two leveraged loan deals in the market this week, for Tele Columbus and PlusServer, have both had their margins tightened by 25bp, suggesting that market participants who predicted early this week that spreads were going to start widening had spoken too soon.

The German Investment Funds Association (BVI) demanded the relocation of euro denominated interest rate swaps clearing from London to the EU 27 on Wednesday, citing regulatory concerns due to Brexit and lower costs for fund companies.

Wüstenrot Bausparkasse became the first German building society to issue a Pfandbrief on Wednesday. The deal attracted strong demand, enabling the issuer to increase the size.

Corestate Capital Holding, the German property manager with €22bn of assets under management, has issued its first convertible bond. The five year deal was increased by €50m due to the strength of the demand.

Eika Boligkreditt closed the pricing gap to Norway’s national champion, DNB Boligkreditt, with a €500m seven year covered bond issued on Tuesday. At the same time Finland’s Oma Savings Bank mandated leads to market its inaugural deal.