Société Générale

As the dust settles on a thunderous week in the European corporate bond market that saw enormous order books and fat new premiums squeezed to nothing in one case, investors and bankers united in joy that the market was not just open again, but bursting with vigour. Central banks and governments had saved the day, they argued. Only a few are worrying about another lurch downwards, though this is more than likely.

Riskier high grade corporate names saw more than €45bn of combined demand for new bonds on Wednesday. Danaher, Carrefour, Bertelsmann, Philips and Heineken were all in the market following a batch of deals from higher rated names a day earlier encourages borrowers to pile in.

Europe’s corporate bond market showed the same kind of energy on Tuesday that the US market did three times last week, as a clutch of blue chip issuers launched new deals on the very first day of stability the market offered. Sanofi found huge demand and only a slight slowness from the UK being in lockdown.

Confectionery company Néstle, soft drink maker Coca-Cola European Partners and French pharmaceutical company Sanofi piled into Europe's bond market with new issues on Tuesday, suggesting that borrowers are increasingly eager and quick to react when the market shows any signs of stabilising.

Siberian Coal Energy Co (Suek) is seeking financing from lenders, according to two market sources. The borrower is braving lenders' wariness about coal companies, which last year weighed on demand for a Suek loan, and the global volatility caused by the spread of the Covid-19 virus.

Air France-KLM has taken a series of exceptional measures including drawing down on €1.765bn of bank debt, as some lenders say that the industries worst affected by the coronavirus pandemic will lean heavily on their lending banks.

On Monday, a day when European stock indices plummeted, hedge fund giant Bridgewater Associates was executing short positions against 37 of the continent's companies, particularly in France, Germany, Spain and the Netherlands.

Banks have started splitting up trading teams across locations, while many of those working in the capital markets have been stuck at home. This has caused a couple of hiccups and worries but some wonder if it will lead to a shift in attitudes about meetings and work flexibility once coronavirus passes.

Vattenfall, the Swedish state power company, issued its second green bond on Thursday, to an enthusiastic reception from investors, who drove the €500m note’s pricing very close to the issuer’s curve.

Europe's high grade corporate bond issuers are being pushed into tight issuing windows by volatility caused by the Covid-19 coronavirus. But investors are prepared for this and so far deals have found strong backing.

New emerging market bond issues have been assessed on a case-by-case basis this week as the spread of the Covid-19 virus delivered sharp swings in global markets. Some borrowers wanted to forge ahead in case of a further sell-off, while others prefer to wait for a recovery.

New emerging market bond issues are being assessed on a case by case basis as a split between those issuers keen to forge ahead and those preferring to delay emerges.