Santander

Southpaw takes a sideways look at some of the big events that defined investment banking in 2019.

The Bank of England said it will increase the countercyclical buffer by 100bp for UK banks after disclosing the results of its latest stress test this week. As the sector performed well in the test, the new capital requirements are being interpreted as a ‘Brexit buffer’ to help institutions withstand the risk of economic turmoil at the end of 2020.

European banks no longer really have to think about building up layers of additional tier one debt. All of the focus has shifted to managing and refreshing this capital layer, and taking full advantage of a ferocious hunt for yield. Tyler Davies reports

Activity is set to heat up in the additional tier one (AT1) bond market in 2020, with as many as 22 bonds approaching their first call dates. Market participants appear confident that conditions will allow banks to refinance and incentivise them to do so.

Groupe BPCE benefited from a bookbuilding process that was shorter than usual on a visit to the Samurai bond market this week, raising about $670m equivalent of preferred and non-preferred senior debt.

Mediobanca was looking to sell its second six year senior bond of 2019 on Monday, revealing its preference for deals in the belly of the maturity curve.

Groupe BPCE and BNP Paribas issued green bonds this week, attracting strong levels of demand for such a late stage in the year.

Merlin Properties, the Spanish real estate investment trust, launched on Wednesday a €500m no-grow 15 year benchmark bond, rated Baa2/BBB, with a positive outlook from S&P Global.

Spain’s FCC Servicios Medio Ambiente and Deutsche Telekom raised euro bonds on Wednesday, in what corporate bond bankers reckoned was the last clear issuance window of the year.

Intesa Sanpaolo and BNP Paribas hurried to make use of strong market conditions this week, building blowout order books for a pair of new senior deals in socially responsible formats.

Tesco, the UK supermarket chain, and US medical equipment firm Stryker sailed through the European bond market on Monday. Both issuers benefitted strongly from having picked the right moment to launch.

High grade corporate borrowers have crammed into what syndicate bankers have labelled the last clear issuance window of the year, with Stryker Corp, Tesco and Arkema out with euro trades.