UK

The Pre-Emption Group, an assembly of listed companiesm investors and intermediaries that monitors pre-emption rights in the UK, has changed its guidelines to say that the impacts of the Covid-19 coronavirus means investors should support companies selling new shares worth up to 20% of their market capitalisation without giving existing shareholders first refusal.

Lloyds Bank is looking to buy back one of its more costly perpetual tier one capital instruments, after its valuation collapsed in March. The move took some market participants by surprise, since it would have been approved by UK authorities, which are at the same time insisting that the country's banks conserve their capital levels during the coronavirus crisis.

The UK Debt Management Office announced plans this week to raise the biggest volume of Gilts in a single calendar month as it prepares for a significant increase to its financing programme from government’s measures to support the economy through the coronavirus outbreak.

The Bank of England threatened to use its ‘supervisory powers’ on UK banks if they did not agree to suspend dividend distributions this year and stop paying cash bonuses to staff. The instructions do not apply to the equity-like CCDS instruments issued by building societies.

Carnival Cruises, the world’s largest leisure travel company, is rolling the dice on a coronavirus rescue package, launching a $1.25bn underwritten rights issue, $1.75bn convertible bond, and a $3bn dual currency high yield bond.

The loans market has been one part of the capital markets that has perhaps unsurprisingly taken to working from home easier than most. Some loans bankers even see a world after the pandemic where one or two days a week working out of the office becomes the norm.

Hipgnosis Songs Fund, the London-listed investment fund focused on song royalties, has acquired the music catalogue of Richie Sambora, the lead guitarist of Bon Jovi and co-writer of the US band’s hits, for an undisclosed price. It is an example of the acquisitions the fund continues to make as it mulls a fresh equity capital raise.

More companies will raise equity capital without first offering existing shareholders pre-emption rights, given the "unprecedented" economic damage being caused by the spread of Covid-19.

Market participants are debating whether the risks to additional tier one coupons have risen or fallen after the European Central Bank urged banks not to pay equity dividends for at least six months.

The Covid-19 pandemic is forcing many of Europe's sovereigns to expand their borrowing programmes. This week's funding scorecard looks at the changes European sovereigns have made to respond to the crisis, and the progress they have made in their funding programmes as we approach the end of the first quarter.

Market participants are already questioning the legitimacy of new ‘expected loss’ accounting rules, with the eurozone, the UK and the US having all now softened the application of their standards for banks during the coronavirus crisis.

Standard Chartered is forming a new financing and securities services unit that will combine securities services, which currently operates within transaction banking, with portfolio risk management in the financial markets business.