UK

Weaker trading conditions have done little to shake expectations for a new wave of additional tier one (AT1) supply, writes Tyler Davies, with three banks having reopened the market in emphatic fashion this week, issuing €3.1bn-equivalent of debt into more than €20bn of demand.

European investors are looking beyond the coronavirus crisis to put equity capital into companies that they believe can take advantage of its aftermath. However, as economies reopen after lockdown, the damage of the pandemic is becoming clearer, and companies are working hard to convince investors that they are the right horse to back.

Market participants re-examined the prospects for covered bond supply in sterling this week in the wake of two deals from SSA borrowers in the currency. Spreads have tightened and issuance conditions have improved but that will have to be balanced against bargain basement priced funding available from central banks, bankers said on Thursday.

NatWest Markets names CEO and CFO — Natixis appoints new managers for UK and Middle East — Barclays' private capital markets boss leaves

Equity capital market participants were in a gloomy mood on Thursday as global equity indices fell in response to the pessimistic tone from the US Federal Reserve. However, European markets remain open for primary capital raising transactions.

HSBC and Standard Chartered are facing a backlash from investors and politicians after publicly supporting China’s planned security law for Hong Kong.

Ocado, the UK online grocery delivery platform, has raised £1bn by selling new shares and convertible bonds to fund its expansion plans amid a huge increase in demand for its services during the Covid-19 pandemic.

Tuesday proved to be another good night for UK primary equity capital raisings as Segro, the warehouse company, and insurance group Lancashire issued new shares.

Nationwide Building Society was able to tighten pricing by 50bp on the sale of an additional tier one bond on Wednesday, landing at a 5.75% coupon. The new issue will increase the bank’s leverage ratio, which went down last year amid a net redemption of tier one debt.

Whitbread, the parent of Premier Inn and Beefeater Restaurants, completed its £1bn rights issue on Wednesday, winning strong support from shareholders, who backed the company’s desire for expansion as the coronavirus pandemic recedes.

The UK Debt Management Office launched a syndication on Tuesday, printing a new October 2050 line and raising £9bn.

Convertible bond issuance in Europe is expected to pick up over the coming months as corporates in the region seek to exit from government lending schemes and refinance themselves via the capital markets.