Santander

The European Stability Mechanism on Monday took care of all its first quarter funding needs in one fell swoop, drawing a heavily oversubscribed book with high Asian demand that allowed 2bp of price tightening. On-looking SSA bankers said the deal was a good sign for — and likely gave confidence to — Spain, which is bringing its second syndicated benchmark of the year on Tuesday.

Banks are circling the additional tier one market, looking to replicate very well received transactions from Crédit Agricole and ING Groep this week.

The European Banking Authority has gone to the private sector for its next appointment as chair.

A flood of orders helped ING Groep to price a $1.25bn additional tier one on top of fair value on Tuesday, with the Reg S dollar market back in action after Banco Santander’s landmark extension decision.

Additional tier ones couldn’t have reacted any more calmly to the first ever extension of a deal this week, but the market is still a long way from overcoming its ultimate test.

The bigger surprise in the financial institutions debt market this week was not that Banco Santander decided to extend the life of an additional tier one bond, but rather that the subordinated debt market took the decision in its stride.

UBS is re-balancing its corporate finance business to end its reliance on its Financial Institutions Group with impressive results, writes David Rothnie.

Banco Santander broke new ground in the additional tier one market on Tuesday, when it said that it would not be calling its €1.5bn 6.25% bonds. Many investors were stunned and even angry about the bank’s actions, which could have major implications for the way in which call decisions are viewed across the sector.

Blackstone Property Partners Europe on Friday made its third visit to the corporate bond market in eight months and opted for a maturity between its two outstanding bonds. The property fund has now printed €1.75bn of bonds since it sold its Logicor logistics business to China Investment Corp in June 2017.

Many of the assumptions that surrounded older iterations of perpetual bank capital instruments are still there in the new class of additional tier one securities.

Rating: Baa1/BBB+/BBB

The theme in the euro public sector market this week was large book sizes despite issuers paying very little concession, with Finland, the European Investment Bank (EIB), Madrid and the Joint Länder all keeping close to their curves.