Pre-migration untagged articles

Six new sizeable covered bonds totalling Eu4.25bn hit the market in the space of a day-and-a-half this week, with Bayerische Landesbank pricing one of only two deals to achieve jumbo size.

OTP Hungary and Slovenia’s Bank Celje received strong support for their recently closed loans, the first from eastern Europe to be launched into syndication this year. OTP’s Eu200m deal especially encouraged bankers, given that it was in the market when Hungarian government officials likened the country to Greece, frightening capital markets. Loans bankers said OTP’s facility hardly suffered as result. Read more on Friday.

Hopes that the second corporate hybrid bond of the year would emerge shortly were dashed on Wednesday, when Dutch utility Eneco Holding, which was due to start meetings with investors, cancelled the deal. The bond issue had been related to the unbundling of energy companies in the Netherlands — which would have required Eneco to split its commercial and grid management activities — after a Dutch court on Tuesday said this requirement broke EU law.

After more than six weeks, the high yield bond market re-opened last week with the crossover issuer Rémy Cointreau in talks to print a high yield bond. This week, the seasoned high yield issuer, HeidelbergCement joins Rémy in the market with plans to sell Eu500m of bonds due December 2015. If successful this will be the first high yield issue since Ineos in early May. Read EuroWeek on Friday to find out if the market is back on track.

The pace of supply in covered bonds has hardly let up, with five issuers having so far this week raised Eu3.75bn of funding via deals of Eu500m or more, and a sixth in the market on Wednesday. This included a Eu1bn five year issue from Banca Monte dei Paschi di Siena, which took the place of UBI Banca in re-opening the Italian covered bond market on Tuesday. But the re-opening of the obbligazioni bancarie garantite segment has been badly managed, say bankers.

A couple of days of stability and a back-up in rates allowed a handful of SSA issuers to dive into the public bond markets. IADB’s successful $2.25bn five year global last Friday gave confidence to BNG to issue a $1bn five year this week, the first non-German European agency to test appetite for European names. In euros, the story is at the longer end with OeBB Infrastruktur issuing a Eu1.25bn 15 year and Cades a Eu2.25bn 10 year. The Republic of Italy is in the market with a five year syndicated floating rate nominal bond (CCTeu).

The FIG borrowers’ market fightback has advanced this week: the market is open to both single-A rated Crédit Mutuel Arkéa bringing a senior deal, and to NordLB raising Eu400m of subordinated debt. Yet weaker days still get in the way of new issuance. EuroWeek asks on what direction the market is heading on Friday.

The primary market recovery in EM took another step this week, through government owned Bahrain Mumtalakat. The single-A rated borrower is expected to sell a $750m bond on Wednesday in a further sign of the market gaining confidence in emerging market borrowers, after Russia’s Mobile TeleSystems opened the door last week. Turn to EuroWeek on Friday for analysis of what the deal means for other EM borrowers eyeing issues.

Borrowers this week raised the stakes in the corporate bond market revival, aspiring to raise larger and more competitively-priced issues than even last week’s. Germany’s Volkswagen Bank printed a Eu1bn bond on Monday at a new issue premium of only mid-swaps plus 5bp, while Italian utility Eni also grabbed Eu1bn, paying a concession of about plus 10bp. On Wednesday, Czech utility Cez looked set to revisit the market, and bond bankers expect primary deal flow to remain high in the next fortnight.

Santander UK joined the private placement bandwagon this week, raising £3bn through its Fosse mortgage master trust. Meanwhile public issuance has slowed to a near halt despite a minor rally in secondary markets. Read EuroWeek on Friday to learn who else may go down the private route.

After French borrowers stormed into the market last week, now it’s the turn of the Spanish companies and both FCC and Iberdrola are in the market, testing lender’s appetite. Utility Iberdrola, rated A3/A-/A- is paying an initial margin of 75bp for a Eu2bn five year back-up facility, more than other recent single-A borrowers such as Linde or Carrefour. To find out more, read EuroWeek this Friday.

Strong local demand helped Polish utility Tauron raise $1.28bn on Warsaw’s stock market this week, making it the second large-cap company to list in the country this year. The deal sends a positive signal to the European IPO market for the second half of the year. IPOs outperformed local European indices by an average of 10.6%, Deutsche Bank research shows. On Friday, EuroWeek takes a closer look at the after market performance of recent deals.