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Navigating the covered bond market will not be without its challenges in 2020. The Targeted Longer Term Refinancing Operation (TLTRO), European Central Bank deposit tiering and the Covered Bond Purchase Programme have collectively distorted the market, but added to this concoction is the impact of negative interest rates. Against this backdrop issuers, investors and investment bankers gathered in Munich in November to discuss the outlook for covered bonds. It is likely that new issue premiums will gradually tighten, but the path is unlikely to be smooth. January is typically the busiest month, but in 2019, issuers that funded this early paid the highest spreads. And, with the ECB expected to buy in the region of €4.5bn covered bonds a month, issuers will not feel compelled to move early. But the ECB monetary policy has unwelcome implications. Covered bonds have begun to lose value against government bonds, and this will extend if the ECB is unable to loosen restrictions on government bond purchases.

European banks are about as close as they can be to having clarity on their minimum requirements for own funds and eligible liabilities (MREL). Now it’s up to them to figure out what impact the new bond standard will have on their funding plans, annual profits and business models. Tyler Davies reports

Banks and insurance companies are finally straining to turn capital markets greener. With many having realised there are savings to be had in issuing green senior bonds, the idea of them embracing sustainable capital instruments seems to be just around the corner. David Freitas reports

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

It was a year when the corporate bond market first had to get used to a world without QE — and then digest its return. Spreads tightened sharply after the summer following the ECB’s decision to restart its Corporate Sector Purchase Programme. But that did not mean all the best deals came after September. Far from it.

The European Central Bank opened its wallet again at the end of 2019 and started buying corporate bonds, but its largesse is a shadow of what it was. With inflation still a long way below target, it is expected to ramp up its buying in 2020

Battling against falling volume, the loan market also has to work out how to replace Libor. Loan market life will surely get more stressful as the clock ticks down to December 2021, when the rate is due to be phased out, although distractions might come in the form of sustainability-linked structures, writes Mariam Meskin

A rich variety of UK borrowers including a football club, two airports, the City and a clutch of FTSE 250 firms turned to US private placements in 2019. UK local authorities remained absent, but a surprise from the UK Treasury in October may be a game-changer

The Schuldschein market is touching records for overall volume and number of deals in 2019, and in any normal year that would be what excites the market most. But instead, most pride comes from the progress made in Asia as well as innovations in sustainable financing

After assembling mega-funds that can commit loans of €1bn and more, direct lenders are gaining ground in leveraged finance at notable speed. Besides size, firms such as Alcentra, Ares, BlueBay and ICG offer borrowers privacy, speed, fixed terms and long-term commitment. But are they all equipped for the torrent of distressed situations the next downturn is likely to bring?

Volumes in European leveraged finance took a dive in 2019, leaving leveraged credit investors struggling to find value. A string of take-private attempts, especially in Germany, had lenders and banker salivating, but fell apart before coming to market

Lawyers in the US have had a busy 2019 drawing up tough documentation to protect borrowers and sponsors from CDS investors — net short activists — trying to get their say on the future of a company. With these provisions spreading to Europe, 2020 could be an even busier year