ING

Investment grade green loans have flourished this year, despite a decline in volumes in the wider loan market. Codification of green and sustainability linked financing by international loan trade associations has boosted environmental, social and governance (ESG) loan issuance in the developed markets, but the emerging markets have so far struggled to get going. Will that change as interest in green financing grows across CEEMEA?

Rating: Baa1/A-/A+

The hail of issuance in European corporate bonds continued at full pelt on Wednesday as Orange and National Grid joined the fray with multi-tranche deals. Investors and issuers seem equally eager to do business.

Europe's corporate bond market opened emphatically for business on Tuesday, as seven issuers banished all memories of the summer holiday. Despite there being plenty of choice for investors, demand was high across the board. Multiple deals were two to three times oversubscribed, while the largest, a €3.5bn four trancher from Siemens, the machinery maker, was nearly 4.5 times covered.

ING slapped a one year call option on a senior deal from its holding company on Tuesday — a practice that is rapidly becoming the norm for European banks considering how to meet their minimum requirements for own funds and eligible liabilities (MREL).

E.On has opened a new era. While several investment grade companies have printed bonds at negative yields before, few have come close to the -0.149% at which the Baa2/BBB rated German power company reached with the five year wing of its €1.5bn dual tranche deal on Wednesday.

Market participants expect more banks will now want to print Kangaroos after investors on a search for yield poured into UBS's additional tier one (AT1) deal on Tuesday. The syndication, which surprised those involved after it managed to shave 75bp off its initial pricing guidance and attract A$4bn ($2.71bn) of orders, suggested a market ripe for a deal spree.

E.On, the German electricity company, ended Europe's summer lull in investment grade corporate bond issuance on Wednesday, and opened a new era in pricing, with the first ever five year bond at a negative yield. And E.On is only rated triple-B.

Aperam, the steel producer headquartered in Luxembourg, has entered the Schuldschein market, on the hunt for at least €100m.

The first investment grade euro corporate bond since Daimler's €3bn four trancher at the beginning of August appeared on Wednesday morning. E.ON, the Baa2/BBB rated energy company, is in the market with a debut green bond — a benchmark five, and 10.5 year dual tranche deal.

Market participants say that secondary spreads of emerging market loans are compressing as activity draws to a standstill, amid signs of slowing global growth and the threat of trade wars.

Medicover is on the hunt for at least €100m of funding in the Schuldschein market. The Swedish healthcare company joins a growing number of Nordic borrowers looking to tap the German loans market.