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Germany's Federal Constitutional Court (BVG) fired a warning shot at the European Central Bank this week. The court’s threat to stop the Bundesbank from taking part in official asset purchasing could have serious consequences for ECB monetary policy and, by extension, bond markets, just when the markets seem to be relying on the central bank more than ever, write Jasper Cox and Lewis McLellan.

Natixis’s corporate and investment bank slumped to a loss in the first quarter, results showed on Wednesday, as it provisioned for credit losses and took a similar hit in equities to its French peers.

A conduit CMBS deal from Goldman Sachs in the market this week is drawing strong demand from investors eager to buy the first new commercial mortgage bonds in nearly two months, while Morgan Stanley is looking to draw buyers for a Los Angeles office CMBS with some unique protections.

European lenders are debating whether it is worth them taking advantage of new IFRS 9 transitional rules, with some market participants suggesting they will largely ignore any capital benefit gained through these sorts of relief measures.

Fitch Ratings announced actions on two GE Capital Aviation Services (GECAS) serviced aircraft deals due to ongoing deterioration of lessees. Investors say the role of the servicer is of heightened importance in the time of Covid-19, as deteriorating economic conditions warrant for a more proactive management of aircraft portfolios.

As Western societies begin to contemplate life returning to some semblance of normality, the financial industry is working out how best to balance the understandable desire to get back to how things were before the crisis with the very real threat of a new and more deadly wave of coronavirus brought on by a mass-return to offices. GlobalCapital’s Silas Brown spoke with Peter Openshaw, a specialist in immunology and virology and professor of experimental medicine at Imperial College, about the transmission of Covid-19 and how banks, investors and companies can reduce the risk of infection.

US and European airlines and aircraft makers have had contrasting experiences in the capital markets during the Covid-19 pandemic, highlighting the two continents’ different corporate finance cultures, as well as the way central bank support is being received in the market, writes Mike Turner.

Issuers are starting to feel more comfortable with the new normal of wider spreads as a flurry of deals dusted the Swiss franc market, including a rare operating-company level visit from UBS.

New issue premiums evaporated in the high grade corporate bond market this week, with multiple issuers printing well through their curve as the world begins to emerge from pandemic lockdown.

Issuance in the financial institutions bond market had a preferred senior flavour this week, with issuers finding this the most cost-effective funding compared with other asset classes. In addition, some of them can use it to fulfil regulatory requirements.

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Volkswagen Financial Services has said it will inject cash into its ABS transactions where borrowers have been granted payment holidays, aiming to top up the deals to protect investors from the decline in likely residual values.