Italy

Car parts distributor LKQ is set to become the first US company this year to issue a high yield bond in euros — and more US names may be on their way, bankers say.

An investor relations manager at Banca Popolare di Vicenza told GlobalCapital on Thursday that the bank still intended to launch its IPO in early April, and to complete it by the end of the month. He called a UniCredit statement casting doubt on that timetable unhelpful.

Consolidation has been a perennial theme in Italian finance, but the country has little to show for it. This time is different.

An investor relations manager at Banca Popolare di Vicenza told GlobalCapital on Thursday that the bank still intended to launch its IPO in early April, and to complete it by the end of the month. He called a UniCredit statement casting doubt on that timetable unhelpful.

Investors holding Italian Treasury certificates will not be required to pay the Italian sovereign if the instruments’ floating rate coupons turn negative — an increasingly likely possibility for an older format of the paper.

Consolidation has been a perennial theme in Italian finance, but the country has little to show for it. This time is different.

Banco Popolare and Banca Popolare di Milano will merge to form Italy’s third largest bank by assets, having been granted permission by the European Central Bank on Wednesday evening. The deal may trigger further consolidation in Italy, and is could be a crucial step towards the modernisation of the country’s fragmented banking sector.

Two equity block trades or rapid sales were completed successfully in Europe on Monday night.

Covered bond primary activity slowed this week with just two €500m seven year trades emerging from banks in the Netherlands and Italy.

World Bank tapped Italian retail investors for $165m this week, issuing a 10 year sustainable development bond.

Portugal cut its funding costs at a bond auction and Italy lined up for a sale on Wednesday, as European Central Bank support protected eurozone periphery government bonds from any knock-on effects from a terrorist attack in Brussels on Tuesday.

Banco Popolare Sondrio returned to the covered bond market for its second ever deal on Wednesday. The substantially oversubscribed transaction was priced close to fair value reflecting a concern that peripheral supply could dry up.