UK

Smaller UK lenders are hoping the Bank of England will limit the scope of the minimum requirements for own funds and eligible liabilities (MREL) this year, relieving them of the potentially challenging task of raising new bail-inable debt in the capital markets.

Rating: Baa2/BBB/A

Hammerson, the UK property company, launched a £550m rights issue on Thursday morning, becoming the latest firm to come to market with a large capital raise to offset the damage of a long Covid-19 pandemic.

Andrew Bailey, governor of the Bank of England, has announced that negative rates are “part of the toolbox” but that he sees no reason to make use of them yet.

Equity capital markets are preparing for a busy autumn, with companies looking to raise cash to survive and thrive through the Covid-19 pandemic. But the window for raking in money may well be small, with a number of factors, of which a rising infection rate is only one, threatening turbulence for some time to come.

Metro Bank has said that it could slip below its minimum requirements for own funds and eligible liabilities in the coming months. It is paying close attention to a review of MREL being carried out by the Bank of England, which may help it to avoid embarking on another costly debt-raising exercise.

The insurance industry is eagerly awaiting the result of a court case which would determine whether they have to pay out Covid-19 claims under basic business interruption policies. If the case goes against them some are expected to hit the capital markets for financing.

Barclays has following Credit Suisse in marketing additional tier one paper in dollars this week, bringing a deal on Wednesday that could be used to refinance an existing euro bond.

Hipgnosis Songs Fund, the London-listed investment fund focused on music catalogues, has used £236m of growth capital raised last month to purchase athe rights to songs by Blondie.

The auditor for digital bank Monzo warned that a slower than expected recovery could lead it to breach its capital requirements, even though at the end of February it had a much better capital ratio than traditional banks. So what’s going on? GlobalCapital wonders if the risk is more about investors’ appetite to continue funding an unprofitable business than the bank breaching the requirements in the next few months.

Freeline Therapeutics, the UK gene therapeutics company, has set a pricing range for its Nasdaq listing, becoming the latest company from the red hot biotech sector to raise equity capital.

The Vanguard Group, the US asset manager which pioneered low cost, index-tracking investment, has sold $3bn worth of private placements. According to GlobalCapital data, this deal is the largest ever recorded in the US private placement market.