NatWest Markets
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A trio of senior borrowers paid minimal new issue premiums in euros this week as Swedbank and AIB Group tapped a sweet spot of demand for bail-inable debt, while Macquarie got attractive pricing compared to its dollar curve. -
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Market participants expect to see the end of “vanilla” deals in the European bank bond market, as tier two debt becomes the latest asset class to embrace call periods over call dates.
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Macquarie shed over a third of its order book on Wednesday as it priced its third euro deal in 18 months at what was deemed a “very tight” level. It was joined in the senior market by Swedbank, which was issuing its first callable non-preferred bond.
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Permanent TSB added to a recent run of Irish bank supply on Wednesday, tapping into strong investor demand with a new tier two in the euro market.
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The financial institutions bond market in euros was on hold on Tuesday, as European issuers saw no reason to rush into doing deals while global equities were selling off and interest rates were being buffeted by expectations of inflation.
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Allied Irish Banks (AIB) sold its sophomore green bond on Monday, printing €750m of senior paper at a spread flat to fair value and close its Irish peers.
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Nordea made a rare entry into the euro tier two market on Monday, taking advantage of strong issuance conditions to steer its pricing in close to fair value.
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European banks began to access the dollar market this week following first quarter earnings, while JP Morgan stole the show on Wednesday with a record low coupon for a preferred note.
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Eni, the Italian oil and gas company, got its chunky €2bn hybrid capital issue comfortably oversubscribed on Tuesday, after a similar success for Orange last week. Corporate bond investors are piling money into anything that offers higher returns.
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Wickes Group, the UK do-it-yourself retailer, has signed an £80m revolving credit facility, as the company completes its postponed demerger from Travis Perkins.
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