UK Sovereign

The UK government will consider selling part of it debut sukuk to retail investors, according to a market official with knowledge of the matter. But some bankers warned that this could over-complicate the deal.

Barclays has announced plans to take an axe to its investment banking operations, a move which will see 7,000 job cuts across the globe by 2016. The restructuring will also see a streamlining of the bank’s Asian operations, but despite the expected downsizing, bankers are not expecting any massive upheaval just yet.

The attention being paid by UK politicians to Moody’s comments on how Scottish independence would affect both the newly independent country and the leftovers of the UK is at best laughable and at worst a sign of the poorest of politicking.

This week's scorecard covers the funding progress of sovereign issuers, with Belgium, Ireland, Netherlands and Portugal all over the halfway mark on their programmes for the year. Next week's scorecard will deal with European supranationals and agencies.

Network Rail is set to leave the capital markets after the UK government decided that it could guarantee better value taxpayer money by lending directly to the agency. But the funding team’s jobs appear to be safe and there has been little impact on Gilts following the announcement.

Ireland's return to bond auctions last month helped the sovereign reach nearly 60% of its funding target for the year. Across the Irish sea, the UK started its financial year with a £2.577bn auction - and a reduced funding target of £128.4bn.

The UK Debt Management Office slashed its Gilt sales target on Wednesday, when it introduced its funding plan for the 2014-2015 fiscal year — a move which should boost demand for UK government bond syndications.

A remarkable start to the year for the eurozone periphery is in clear view in this month's sovereign funding scorecard. Just two months into the year, Portugal has completed more than half of its target, while Ireland is not far behind. At the other end of the volume spectrum, Spain is making good headway in tackling its €133.3bn target with 26% completed, while Italy — which has yet to sell a syndication this year — is behind on 18%.

The SSA bond market could have a new issuer to look forward to after the UK government on Wednesday handed the devolved government in Scotland the power to issue its own bonds.

Demand for the UK Debt Management Office’s last syndication of the fiscal year on Wednesday broke records. A reopening of the 2068 index linked Gilt attracted the largest ever book for a UK linker syndication.

The rampant start to 2014 by peripheral eurozone sovereigns is clear to see in this week's funding scorecard, with the region's comeback kids Ireland and Portugal halfway and a quarter way through their funding programmes already. Spain has also made promising progress in its attempt to hit what is its largest ever funding target, with nearly a fifth of its total already in the bag. Italy will look to move into double figures from its 4% status in the coming weeks with a widely expected syndication.

The United Kingdom’s debut sukuk is unlikely to come before October, although the government plans to make an announcement on the deal before July, according to a source with knowledge of the situation. HSBC is frontrunner among banks to arrange the deal, added the source.