UK

Speaking at a Treasury Committee hearing on Wednesday, Sir Robert Stheeman, chief executive of the UK’s Debt Management Office, said that he was not concerned about the Bank of England’s decision last week to slow down the pace of Gilt purchases until the end of the year.

Private debt blossomed after the last financial crisis, as European companies grew more sophisticated and sought to diversify their funding strategies away from bank loans and bond markets. But the coronavirus has highlighted its shortcomings, particularly around speed of execution. It may be hard to regain the momentum.

Wednesday evening proved a busy night for equity bock trades, despite wider sell-offs in secondary markets over fears of a second wave of Covid-19.

The UK government showed this week that it plans to differ from the EU in its approach to banking regulation after Brexit. Divergence will begin with the minimum requirements for own funds and eligible liabilities (MREL), but a new consultation opens the way for further changes.

UK airline EasyJet has raised £418m of fresh capital to bolster its balance sheet after reporting a significant half year loss because of the impact of the Covid-19 global pandemic on its business.

Skipton Building Society announced on Wednesday that it was looking to buy back one of its senior bonds. The tender offer will give investors a premium over secondary market and help the issuer optimise its liability base.

Royal Bank of Scotland and ING were set on Wednesday to add to a recent run of dollar bond issuance from European banks, with some issuers having clocked up huge savings in the currency versus what their home markets can offer.

The repeated presence of European issuers in the bond market of late is testament to the prudence with which they are building up capital for what could be tough times ahead.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, June 22. The source for secondary trading levels is ICE Data Services.

German pharmaceuticals company Boehringer Ingelheim has sold its remaining stake in UK drug maker Hikma Pharmaceuticals, after a surge in investor interest in pharma stocks during the Covid-19 global pandemic.

Andrew Bailey, the governor of the Bank of England, has hinted at a dramatic reversal of the central bank’s long-standing monetary policy strategy, with the idea that it would be better to reduce the stock of its asset purchases before raising interest rates.

The US Federal Reserve will publish the results of its latest bank stress tests this week, after updating the exercise to include three new scenarios related to Covid-19. The new scenarios could have a bearing on dividend policy, but capital requirements will still be based on the pre-pandemic stress test model.