Santander

A trio of senior borrowers paid minimal new issue premiums in euros this week as Swedbank and AIB Group tapped a sweet spot of demand for bail-inable debt, while Macquarie got attractive pricing compared to its dollar curve.

Santander’s equity capital markets tie-up with Peel Hunt finally provides it with the entry into the UK that it has been seeking while giving the UK broker the firepower to compete with the biggest banks ahead of its planned listing, writes David Rothnie.

Market participants expect to see the end of “vanilla” deals in the European bank bond market, as tier two debt becomes the latest asset class to embrace call periods over call dates.

Macquarie shed over a third of its order book on Wednesday as it priced its third euro deal in 18 months at what was deemed a “very tight” level. It was joined in the senior market by Swedbank, which was issuing its first callable non-preferred bond.

Permanent TSB added to a recent run of Irish bank supply on Wednesday, tapping into strong investor demand with a new tier two in the euro market.

Europe’s high grade corporate bond market ignored a deeply red day in equity markets on Tuesday, and Volkswagen Leasing and Eurofins Scientific got a decent run at printing new debt.

The spread benefit of ESG-linked debt was on clear display in Europe’s corporate bond market this week. For the second time in days, investors were offered two similar transactions and paid significantly more for the ESG option, in this case a green bond from Red Eléctrica.

A smattering of European investment grade companies are lining up bond issues, as May continues to bring the turnaround in issuance levels that the market had been hoping for in the run-up to the UK bank holiday at the start of the month.

Allied Irish Banks (AIB) sold its sophomore green bond on Monday, printing €750m of senior paper at a spread flat to fair value and close its Irish peers.

Nordea made a rare entry into the euro tier two market on Monday, taking advantage of strong issuance conditions to steer its pricing in close to fair value.

European banks began to access the dollar market this week following first quarter earnings, while JP Morgan stole the show on Wednesday with a record low coupon for a preferred note.

Deutsche Bank scored a blowout book with its first euro additional tier one since 2014 this week, as investors rewarded the issuer for progress on its turnaround plan. Banco Santander then gave the asset class another shake, with a deal split across euros and dollars.