NatWest Markets

The European Investment Bank and the European Union kicked off April by printing impressive benchmark deals, yet despite this strong start to the quarter SSA bankers fear that a combination of the threat of a Brexit and the low yields on offer in the euro market will make conditions extremely challenging for issuers.

Réseau de Transport d’Électricité (RTE) rolled out the European corporate bond market’s second 20 year bond of the year on Tuesday as investors lapped up the duration on offer.

The European Investment Bank built a book of €8bn for a 10 year Earn on Tuesday as the 10 year Bund yield fell to a 12 month low, leading bankers on the deal to suggest tougher times may lie ahead for euro issuers.

European Investment Bank is expected to comfortably print a 10 year Earn on Tuesday, but bankers have expressed concern for the prospects of other issuers looking to sell deals in the currency as yields fall to near record lows.

A former head of UK equity capital markets at Bank of America Merrill Lynch has been appointed chief executive of UK Financial Investments, which manages the government’s stakes in Lloyds and Royal Bank of Scotland.

French pharmaceuticals company Sanofi revived the zero coupon bond on Tuesday as it returned to the bond market issuing its favoured triple tranche structure.

Fiat Chrysler Automobiles issued €1.25bn of unsecured bonds on Wednesday, the second crossover deal in the European corporate bond market this week.

Low profitability remains the main risk for euro area banks, according to the European Central Bank’s annual report on banking supervision, and with little sign of revenues rising in 2016, more and more financial institutions are turning to technology to cut costs.

HeidelbergCement issued a benchmark high yield bond on Monday that was increased to €1bn and nearly three times oversubscribed.

A postponed deal as issuers clashed in the SSA market left a blemish on a strong week for the improving public sector dollar bond market. But such occurrences may well become the norm as issuers crowd in to narrow windows, writes Craig McGlashan.

Sappi Papier, the Austrian-South African paper manufacturer, sold €350m of secured notes at 4% to refinance its 2021 dollar bond, in a European high yield market that has brought forward its post-Easter pipeline of deals.

There was little sign of post-AB InBev indigestion in the corporate market on Thursday as Energias de Portugal issued a €600m seven year bond.