Nordea Markets
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Nordea said on Thursday that it was expecting to save more than it had initially expected by re-domiciling in Finland, owing to lower costs from a series of consent solicitations and lower payments into resolution and deposit guarantee schemes. -
The Basel III reforms will create a 4% capital shortfall across the banking sector that could be covered in close to three years, according to analysts at UBS.
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As fund managers fill their pockets with corporate leveraged finance debt, borrowers like BMC Software are taking advantage of strong conditions to slash funding costs across their financial structure.
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Improving bank credit and tightening in other asset classes have widened the appeal of additional tier one (AT1) paper. But newcomers should make sure they price in the risks of resets and call options.
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Nordea beat the record for the lowest coupon on an additional tier one (AT1) bond in a core currency by some margin on Tuesday, pricing its deal at 3.5%. It had market participants wondering whether AT1 prices should be marketed at a spread over the base rate rather than as a coupon. At the same time, some said investors are showing complacency over the reset spread and call optionality they give issuers, writes Jasper Cox.
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Nordea smashed the record for the lowest coupon on an additional tier one (AT1) in a core currency on Tuesday, as it racked up about €6bn of demand and ratcheted in the pricing from initial price thoughts by 50bp-75bp.
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The supply of hybrid bonds continued this week, with an additional feature — both hybrids sold this week were certified as green bonds.
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Borrowers and investors marched on in the European leveraged finance markets this week, pricing €1.5bn of high yield bonds while bankers have been able to tighten terms on new loan deals during syndication. Deals pulled earlier in the week in the US are already a fading memory.
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Danish power company Ørsted has wasted no time in issuing under its new name after leaving the Dong Energy brand behind earlier in November. On Thursday the issuer sold a green hybrid and a green senior bond, as well as announcing a tender offer for its shorter dated bonds.
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A rush of consolidation has swept through Europe’s payments processing industry in the past six months and the financing for two of the deals, the acquisitions of Nets and Paysafe, hit the leveraged finance market this week.
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Subordinated bonds from financial issuers have been back in favour in the Swedish krona market this year, with investors seeking out higher yields compared with other types of credit.
