UK

Santander UK has requested investors’ consent to alter the terms of four sterling covered bonds from referencing Libor to Sonia. The borrower will use the same method it used when converting its additional tier one notes for the fixed rate deals, while changing the floating rate notes will be a simpler task.

UK government borrowing is rocketing, with the country intending to borrow £485.5bn in its 2020/21 financial year. This has already pushed up its debt to GDP ratio over 100%, but the announcement of next quarter’s £92bn remit caused scarcely a ripple in the Gilts market on Wednesday. Market participants believe that any problems of debt sustainability or spiralling inflation are too distant a prospect to trouble them, writes Lewis McLellan.

The UK government said that it will not compensate holders of index-linked Gilts following the reform of the Retail Price Index (RPI) measure of inflation, which is expected to be enacted no earlier than 2030.

BNP Paribas took advantage of the thirst for duration in the euro bond market on Thursday, offering investors a chance to get hold of long dated non-preferred senior paper.

Equity bankers have predicted a strong end to 2020 for primary issuance as more companies seek to raise capital to take advantage of bullish market conditions in preparation for 2021.

The UK government tightened guidance for local authority borrowing on Wednesday, in a bid to stymie the riskier borrowing-to-invest models certain UK councils have adopted over the past decade.

The UK Debt Management Office provided an update to its funding programme following the Spending Review and the Office for Budget Responsibility’s Economic and Fiscal Outlook on Wednesday.

UK homebuilder Bellway has sold £130m of US private placements, according to market sources, across seven and 10 years. This is likely to be the last broadly marketed USPP deal of the year.

Luminor Bank was more than 3-1/2 times subscribed on its return to the euro market on Wednesday, allowing it to demonstrate a year-on-year improvement in its senior funding costs.

London-listed Gresham House Energy Storage Fund attracted strong interest from investors in its 114.3m share issue as green stocks continue to prove popular with ECM investors.

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Greencore, the Irish food company, has placed £90m of new shares via an accelerated bookbuild on Monday evening.