NatWest Markets

Investors threw off the caution on Thursday that saw them hesitate over lower-rated investment grade corporate bond deals offering low spreads on earlier in the week.

Two more sterling benchmarks from investment grade corporates hit the market on Thursday, extending a strong week for bonds in the currency.

Agence France Trésor tapped into strong pent-up demand to draw a bumper book and print its largest inflation linked benchmark since the 2008 financial crisis — despite offering just a few basis points of new issue premium.

BASF SE was on Wednesday set to become the first sterling issuer into the primary market with an outstanding bond that is already eligible for purchase under the Bank of England’s Corporate Bond Purchase Scheme, which kicked off on Tuesday.

The ebullient tone that characterised the first three weeks of September has faded as investors begin to fret over the US presidential election on November 8, but there is still life in the SSA market.

Babcock International, the UK support company for infrastructure and defence services, issued a £250m no-grow bond on Tuesday, the same day the Bank of England began buying sterling corporate bonds.

Vodafone shrugged off a troubling start to the week for primary bond markets on Tuesday by selling a benchmark long seven year transaction that was more than three times oversubscribed and won a single digit concession.

A pair of public sector borrowers were able to sell tightly priced euro deals on Tuesday, with another two trades likely to follow on Wednesday.

High Speed Rail Finance, the financing vehicle for the High Speed 1 (HS1) project — the train line between London and the channel tunnel to France — said on Monday it was planning on issuing £314m of private placement notes.

Banks are poised to seize this year’s best window for new regulatory capital issues after the Federal Reserve decided against lifting interest rates this week. With primary activity down $15bn on 2015 in Europe and secondary markets reacting positively to the Fed, investors are expecting supply across all asset classes.

Barclays launched a tender offer for up to £1.7bn of its outstanding subordinated debt this week, as the bank extends a strong and rapid drive towards a holding company funding model.

Deutsche Bank is at real risk of failing to pay coupons on its additional tier one instruments, as a potential $14bn US RMBS settlement threatens to erase the bank's available distributable items (ADIs). Outstanding DB AT1 securities reacted accordingly last Friday, shooting nearly 200bp wider.