Santander

A last minute additional tier one deal from Banco Santander this week had investors crossing their fingers in the hope that they can survive 2019 without seeing a bond being extended past its first call date.

On Thursday, Imperial Brands bucked the recent trend of ethical and sustainable corporate bond issuance, but found plenty of demand for its latest deal. The UK tobacco group had not accessed the bond market for more than two years.

Banco Santander opened books on a new additional tier one deal in dollars on Wednesday, surprising market participants who thought the Spanish bank would not refinance an older series of euro notes before their call date on March 12.

All three public sector borrowers in the euro market on Tuesday received record order books, despite the spreads tightening by up to 5bp during pricing — which left little to no concessions for investors.

Latam Airlines returned to the bond market for the first time in almost two years, printing $600m of seven year paper.

Demand for corporate bonds is strong but it is at its strongest for green and hybrid debt, especially for deals that combine both qualities. On Tuesday, Spanish utility Iberdrola found similar demand for green hybrids to that which Engie and EDP had benefited from in January, and market participants are starting to revise their issuance forecasts for the asset class.

Finland and Madrid hit screens on Monday to capitalise on the red hot appetite for euro sovereign supply in the 10 year part of the curve.

Financial institutions bond bankers are hoping that the additional tier one market is back in fashion with investors, after UBS was able to attract a whopping $16bn of orders for a $2.5bn transaction this week.

Spanish telecoms company Telefónica on Monday launched the first green bond in euros from the telecoms sector. The firm, rated as one of Spain’s leading companies in the fight against climate change, published its Sustainable Development Goal (SDG) framework in November but had to wait two months to sell its first green bond.

Bankers and investors are expecting lower volumes of non-preferred senior issuance for 2019, with the majority of issuers looking at the asset class tending to be smaller and infrequent users of capital markets.

Additional tier ones issued by Banco Santander plunged in value on Wednesday, after the Spanish financial institution reiterated that it would only redeem capital securities at their first call dates if it was cost efficient to do so.

French hotel company Accor launched new hybrid and senior bond issues on Thursday after announcing the deals at the end of last week. The new deals finance tender offers for some of the company’s existing hybrid and senior notes.