NatWest Markets
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There were no issues of competing supply on Tuesday as three eurozone sovereigns amassed big order books, buoyed by last week’s expansion of the Pandemic Emergency Purchase Programme (Pepp). -
Northern Powergrid, the UK energy distribution company, brought the longest sterling deal of the year so far with a 42 year trade on Tuesday, as syndicate bankers say that European investors are keen to see more long duration trades.
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Greece and Ireland are set to test the primary bond market this week, returning to one buoyed by a fresh injection of confidence after the European Central Bank expanded its Pndemic Emergency Purchase Programme (Pepp) last week.
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Europe’s high grade corporate bond market saw a steady stream of trades this week, with the bigger than expected fresh wave of bond buying announced by the European Central Bank forecast to keep the rally in corporate credit going.
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Italy once again asserted its market access on Wednesday, raising a staggering €14bn — its biggest single tranche bond ever. The new issue was timed just ahead of Thursday’s ECB meeting, at which the governing council is expected to expand its Pandemic Emergency Purchase Programme (Pepp).
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Four public sector borrowers hit the dollar market on Wednesday, including a rare seven year deal from new issuer International Development Association (IDA).
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French food company Danone led the pack in a strong day for vanilla corporate bond issuance in Europe, with an €800m deal, as some syndicate bankers say recent borrowers are looking to return to the market soon to take advantage of tightening spreads.
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Europe’s investment grade companies added to the workload of a rejuvenated but busy green bond market on Wednesday with deals from Alliander and Prologis. But debt bankers believe that, after weeks of emergency funding in response to the coronavirus pandemic, the coming weeks should bring the return of more run-of-the-mill trades.
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The European Investment Bank raised $5bn with a three year global benchmark on Tuesday, setting the stage for fellow SSA borrowers to tap the dollar market later in the week.
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Italy and the European Union will reboot the euro public sector bond market on Wednesday after announcing syndications of new 10 and 15 year bonds, respectively. The deals will come ahead of the European Central Bank’s meeting on Thursday, in which it is widely expected to increase the size of its Pandemic Emergency Purchase Programme (Pepp).
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The Council of Europe Development Bank is preparing to issue its second Covid-19 response bond which will also be its first ever trade in dollars under its social inclusion framework.
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