NatWest Markets

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.

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.

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.

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.

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.

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.

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.

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.

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.

Vattenfall, the Swedish state power company, issued its second green bond on Thursday, to an enthusiastic reception from investors, who drove the €500m note’s pricing very close to the issuer’s curve.

Transition bonds, one of the hottest talking points of the past year in the green bond market, made a decisive step forward this week when Cadent Gas, the UK’s largest gas distributor, issued a €500m deal that attracted large orders from environmentally concerned investors, even though some green bond funds shunned it. Jon Hay reports.

Optivo, the UK housing provider, has mandated banks for a long maturity sterling deal, a day after a compatriot housing association found healthy demand for a similar 23 year note in the currency.