Santander

European authorities applied the bank recovery and resolution directive (BRRD) for the first time on Wednesday, placing Spain’s Banco Popular into resolution and approving its sale to Santander. The regulatory process, in which additional tier one (AT1) and tier two bonds were wiped out, has far ranging implications for all market participants working on financial debt.

With the Credit Suisse rights issue closing this week and the completion of cash calls by Deutsche Bank, UniCredit and Millennium BCP earlier in the year, the latest wave of big bank recapitalisations looked like it was drawing to a close, until dramatic news on Wednesday this week.

A pair of eurozone periphery SSAs are tackling opposite ends of the euro curve this week. Italy will launch a 30 year benchmark on Wednesday, while a Spanish agency drew a doubly subscribed book for a three year.

European banks have already made stellar progress in working through their issuance programmes in 2017, shifting emphasis on to those with shortfalls or ‘strategic trades’ left to complete.

Rating (expected): BBB-

Corporate bond issuance in Europe slowed to a trickle on Thursday after a gush of trades on Wednesday, as investors said they were growing increasingly tired of the recently popular execution method of offering a chunky spread at initial price thoughts, only to tighten markedly by final pricing.

The stampede by corporate dollar issuers continued into a second consecutive week with Italian energy giant Enel printing the largest ever deal by an Italian corporate in the US investment grade market, and the second biggest Yankee deal of 2017.

Sparebanken Sør Boligkreditt and Société Générale enjoyed solid receptions for their covered bonds this week, with the Norwegian issuer pricing flat to its curve.

Santander placed three taps of a senior non-preferred May 2023 line on May 19, raising a total of €270m. The issuer was one of the first Spanish banks to issue this type of private placement, which drew significant investor demand.

Santander effectively opened the Swiss market for senior non-preferred notes on Tuesday as it raised Sfr400m in the largest deal of its type, encouraging for a market looking for future TLAC issuance.

UK corporates are preparing for the large UK banks to bring down their ring-fences, a move that could shake up the banking landscape and push more corporates to sign credit support annexes with their banks.

Public holidays will cut short the issuance window at the end of May, but banks have enjoyed a busy month and a flurry of deals have arrived in the market this week.