North America

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.

Goldman Sachs and Morgan Stanley have received the green lights from the China Securities Regulatory Commission (CSRC) to increase ownership in their Mainland joint ventures to 51%.

Toronto Dominion Bank attracted a slightly larger order book for its three year dollar covered bond on Friday than Bank of Nova Scotia did for a similar deal issued on Wednesday. Both deals offered a considerable pick-up to where they would have been expected to be priced in euros, but the overall spread outlook remains a subject for hot debate. At the same time on Friday, Canadian Imperial Bank of Commerce was set to issue a ‘blow out’ three year Swiss franc deal.

Unusual or less traditional ways of trading bonds — via electronic platforms and exchange-traded funds — look set to come out well from the recent market turmoil.

In this round-up, Chinese industrial profits recorded the steepest drop in a decade, US president Donald Trump praised China’s understanding of Covid-19 and Hong Kong bourse’s Charles Li said closing the market is not the solution to stem sell-offs.

Those working in capital markets have found aspects of working from home difficult. But many believe the new routines will not be put back in the box once offices are allowed to fill up again.

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.

Issuers and investors in the Swiss franc market are grappling with much wider spreads on domestic and foreign issuers because of the volatility around the coronavirus pandemic.

US companies have smashed the all time record for bond issuance this month, as they plundered the dollar market in a headlong dash for liquidity that continued on Thursday, even though a darker record was broken: 3.3m new unemployment claims, more than four times the previous highest.

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.

Latin America bonds may not be immune to the generalised improvement in tone in credit markets this week, but that secondary markets remains dysfunctional and a return to primary market action could be some way away.

Bank of Nova Scotia issued its first dollar covered bond benchmark since 2016 on Wednesday. The deal follows a series of retained Canadian dollar covered bonds that were pledged to the Bank of Canada after it recently broadened repo eligibility to include the asset class.