Pre-migration untagged articles

Standard & Poor’s on Wednesday proposed changes to its covered bond rating methodology that would establish an explicit link between covered bonds and their issuer’s creditworthiness.

A swarm of issuers tapped the Swiss franc market this week in rapidly changing market conditions. The Province of New Brunswick returned after a long absence, Rentenbank issued twice, and Nykredit sold the first Danish government guaranteed bond in the currency.

US dollar swap spreads are as yet unmoved in the face of pending record amounts of Treasury debt.

The inaugural transaction for Dexia Crédit Local government is off to a good start with Eu3bn of orders pouring in. Pricing is expected this afternoon around the guidance of 85bp to 90bp over mid-swaps. The transaction is jointly guaranteed by France, Luxembourg and Belgium and is the first of its kind. Barclays Capital, BNP Paribas, Dexia CM, HSBC and Société Générale are leading the transaction.

If it is a little quieter than recent weeks in the corporate bond market, it is only because supply is drying up as firms go into their pre-results blackout periods. Investors are still hungry for paper, allowing issuers that have approached the market to see their deals fly. Deals from RWE and La Poste yesterday pushed the issuance for 2009 past the Eu50bn mark, and today, Shell’s offer of three and seven year paper (marketed with revised guidance of mid-swaps plus 90bp to 100bp and plus 120bp to 130bp respectively) has attracted a book of Eu10bn. To find out how all the deals in the primary market this week fare, read EuroWeek this Friday.

At last, Deutsche Bank is not in the wilderness anymore and has found a friend in Banco Sabadell. The Spanish bank has announced that it will not be calling its Eu300m lower tier two issue, citing changing markets, unattractive current funding levels and other issuers. How are investors reacting? Read EuroWeek on Friday.

More distressed businesses are tapping Europe’s equity market as Nordic airline SAS seeks SKr6bn ($727.6m) in a rights issue after making a SKr6.32bn net loss in 2008. Underwriters JPMorgan and SEB are taking on 42.4% of the risk, with the remainder guaranteed by Sweden, Denmark, Norway and the Wallenberg Foundation. Have underwriters found renewed confidence in risk taking? Read EuroWeek on Friday.

Baugur, the Icelandic investment firm, went into administration this morning, casting uncertainty over its buy-out portfolio. The group has used about £750m of leveraged loans to take over UK retailers such as House of Fraser, Oasis and Jane Norman. Today’s move comes after Landsbanki, Baugur’s main bank, ended restructuring talks with the company. The portfolio might now fall into the hands of lenders.

The European Bank for Reconstruction and Development issued its first Romanian leu bond to be listed in both Bucharest and London yesterday (Tuesday). It is L115m ($34.68m) 10 year organised by Société Générale. Australian dollars, too, have continued to attract foreign investment — Commonwealth Bank of Australia issued an A$150m five year bond at 65bp over mid-swaps. The issuer is also planning to print the first New Zealand dollar deal since September tomorrow, a minimum of NZ$100m three year 4% at 55bp over mid-swaps. It will self-lead the deal with RBC and TD Securities. Rabobank yesterday found enough domestic demand to print A$600m in a dual tranche, A$400m floating at 130bp over three month BBSW, and A$200m at 130bp over mid-swaps. Read EuroWeek on Friday to find out how the deals went.

Landesbank Baden-Württemberg today (Wednesday) launched the first jumbo Pfandbrief issue since last August, a five year deal that is set to be priced at the tight end of guidance. Read EuroWeek this week for analysis of how the level compares with recent non-German issuance and what its implications are for further jumbo supply.

Trafigura, the Dutch commodities trader, has launched a $350m refinancing facility, becoming one of the few borrowers to try and syndicate a deal since the start of the year. Trafigura will host a bank meeting in London on Monday. Read about the deal later today at euroweek.com/loans

Royal Bank of Scotland tapped its November 2011 government guaranteed transaction on Tuesday, adding £1.75bn and Eu1bn to each tranche. While there was no questioning investors’ appetite for the issue given the total book size at Eu3.5bn equivalent, some market participants were critical of the pricing of the taps, in particular the sterling tranche. To find out more about the deal and the pricing rationale, read EuroWeek this week.