NatWest Markets

CaixaBank and BayernLB were able to sail through fair value with green non-preferred senior deals this week, bucking a trend for rising new issue premiums in 2021. Bankers say a lack of supply is finally helping borrowers to exert more power over their pricing.

Whitbread, the UK hotel and pub company, amended and extended its revolving credit facility at around the same time as it stormed the bond markets with a blowout debut green trade.

Banco Santander has followed Belfius Bank in launching a very successful new seven year bond this week, as bank treasury accounts lend their support to low yielding preferred senior paper.

The International Development Agency sold a sterling benchmark on Wednesday, raising £1bn with its second benchmark in the currency.

Whitbread, the UK hotel and pub company, enjoyed roaring demand for its debut green bond on Wednesday, as it managed to convince investors that it can plan for life after lockdowns.

Telefónica, the Spanish telecommunications company, showed the depth of demand for green hybrids on Wednesday, with a seven times oversubscribed trade that came a day after a similarly successful deal from compatriot issuer Iberdrola.

Companies with high carbon emissions are preparing for the risk that they could have to pay more to access capital markets, if investors and banks retreat from fossil fuel-heavy businesses, and even divest altogether — as Aviva has threatened to do. Some issuers will use investor relations drives and labelled financings, but ultimately they will have to find common ground with investors on how to transition to low carbon.

BayernLB was able to close the books on its debut green bond after only three hours on Wednesday, as investors piled into the tightly priced transaction.

Iberdrola, the Spanish utility, received booming demand for its green hybrid on Tuesday, as the combination of a higher yield and green debt helped books swell to €9.5bn.

Portugal mandated banks on Tuesday to lead the sale of a new 30 year bond as it looks to pounce on the strong investor appetite in the long end of the euro curve.

CaixaBank found €3.7bn of demand for a green senior bond on Tuesday, as investors revealed their hunger for new paper. BayernLB could follow with a green deal of its own against the improving backdrop in euros.

Whitbread, the UK hospitality group, has mandated banks for a debut green trade, setting up a pricing battle between a red hot bond structure and a Covid-19 battered sector.