NatWest Markets
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The MTN market is picking up as issuers (particularly corporates and SSAs) and investors find opportunities for attractive deals. -
Lloyds Bank Corporate Markets spied an opportunity to launch a new senior bond on Thursday, with credit markets performing well despite the tougher backdrop in equities this week.
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KfW made an impressive statement by taking out size with a small new issue premium for a three year euro deal on Wednesday. Bankers say the deal is a sign of concessions reaching a floor following the huge premiums offered since the return of SSAs to the primary market.
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The euro market for SSAs has returned to life in impressive style, but borrowers outside the ECB’s asset purchase programme are meeting with a chillier reception than their European counterparts.
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The UK's Imperial Brands, formerly Imperial Tobacco, has signed a new €3.5bn three year multi-currency revolving credit facility, slightly increasing its main bank line, despite not having plans to draw down.
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CPPIB Capital hit the euro market on Monday, becoming the first SSA borrower not eligible for QE to access the market since the coronavirus outbreak shuttered the market. A fellow Canadian is set to follow suit.
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Bank of America reopened the market for financial institution bonds in euros this week and was followed by a slew of other deals as investors welcomed wider spreads and new issue concessions.
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The volume of new euro senior debt sold by banks has hit €10bn this week, following deals from Barclays, Credit Suisse and NatWest Markets on Thursday. Yield and spread levels remain high, but market participants have been delighted to see investors throwing their confidence behind new transactions in the middle of the coronavirus crisis.
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Riskier high grade corporate names saw more than €45bn of combined demand for new bonds on Wednesday. Danaher, Carrefour, Bertelsmann, Philips and Heineken were all in the market following a batch of deals from higher rated names a day earlier encourages borrowers to pile in.
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This week, it was the best of times, it was the worst of times – and despite volatility caused by the spread of the Covid-19, a trickle of MTN issuance has managed to slip through into the market.
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The recent fall in the price of oil is having a knock-on effect on non-core currency issuance. While oil dependent markets could take a hit as their currencies weaken, some net importers could benefit from a stronger currency and safe haven flows.
