NatWest Markets

Toronto Dominion Bank has become only the second borrower from outside of the UK to sell a Sonia-linked covered bond, having quickly met enough orders on Monday to launch a £1bn offering in the sterling market.

Saudi Arabian banks Alawwal Bank and Saudi British Bank have completed their merger. The deal is yet another bank tie-up taking place in the Gulf, as lenders strive to stay competitive. Royal Bank of Scotland, which held a stake in Alawwal, has received capital relief from the transaction.

With equities in green, Thursday was a fair sailing day for corporate bond issues in Europe, and five issuers took advantage, including two French names and two Swedish. Demand was strong and terms tight.

Rating: BBB/Baa3

The Inter-American Development Bank this week capitalised on a dearth of supply at the 10 year point of the curve to print its second dollar benchmark of the year.

Three SSA borrowers issued a total of £200m ($255m) of medium-term notes in response to an inquiry for three year non-call one fixed rate sterling bonds on Tuesday — which probably all sold to the same buyer — amid an uptick of paper in the currency.

It's not often a €1.75bn deal from Volkswagen Leasing is overshadowed in the corporate bond market, though that was the case on Wednesday with Berkshire Hathaway's £1.75bn 20 and 40 year stormer. But Berkshire left euros clear for Volkswagen - it only had Bright Food of China to compete with.

There was high demand for dollar SSA paper as Kommunalbanken (KBN) printed at its tightest ever spread against the US Treasuries on Wednesday. Meanwhile the Province of Ontario has mandated for its own benchmark transaction.

Investors piled into deals for Spain and Italy on Wednesday despite the miniscule yields on offer, as the spectre of further easing of monetary policy looms large over the market.

Associated British Ports defied sceptical observers this week and succeeded in persuading holders of a £65m floating rate note to switch its coupon to one set over Sonia — a global first. ABP managed to do it without paying investors a fee, potentially setting a precedent for others to follow. ABP is certainly likely to try again.

Ford Motor Credit and Aéroports de Paris issued investment grade corporate bonds in Europe on Tuesday, while Spie joined them with an IG-style but high yield-rated deal.

Kommunalbanken has mandated for a 2024 dollar benchmark, as SSA bankers say the market remains positive for new issuance.