UK

SMBC has made two additions to its London desk for syndication origination in structured finance.

A £285m block in Trainline, the UK the transport booking website, was covered quickly on Thursday night after a lock-up was waived on KKR and other pre-IPO shareholders.

The private equity consortium behind the $3.4bn leveraged buyout of UK satellite company Inmarsat is testing the limits of investor patience with exceptionally aggressive terms for $1.125bn of senior notes, potentially leading the high yield market down a slippery slope.

It has been an explosive week in the sterling market, with foreign and domestic names raising £2.9bn of debt on the back of £13.05bn of combined demand in the space of just three days. But there are more big tests for sterling funders in near future, with a bond market comeback for the UK’s Metro Bank being chief among them.

Sirius Minerals, the company that is building a giant fertiliser mine beneath the UK's North York Moors, faces up to six months of uncertainty after it failed to issue a $500m high yield bond that would have secured its financial future, and the UK government refused to provide support to the project. Karoliina Liimatainen and Aidan Gregory report.

Lloyds Bank, Virgin Money and Skipton Building Society took advantage of an improvement in market conditions since the European Central Bank’s policy meeting, and the UK Parliament’s efforts to legislate against leaving Europe without a deal, to issue a string of successful covered bonds this week.

Liberbank’s inaugural covered bond issued on Wednesday showed that investors are still hungry for paper that offers a positive yield and good relative value. The Spanish deal drew more than twice as much demand as Skipton Building Society’s competing negative yielding transaction, which was the third UK covered bond issued this week.

Barclays has become the second financial institution to issue an additional tier one (AT1) in the sterling market this week, supported by a quiet backdrop in UK politics and healthy investor demand. The issuer was 7.5 times subscribed for its £1bn deal.

Nationwide Building Society raised £600m of additional tier one (AT1) capital this week with the help of strong support from sterling investors, some of whom were pleased to see that the UK lender had developed a more efficient method for calling and refinancing deals in the asset class.

Sirius Minerals is in big trouble, and that means big losses ahead for the mainly retail investor base, who saw their shares dive 50% on Tuesday morning. Since the crisis, regulators have strained every nerve to keep complex, risky products out of retail hands — while retail investors have merrily piled into loss-making tech stocks and cryptocurrencies, and gambled on extractive industries. How much protection do they need?

Nationwide Building Society was more than six times subscribed on its return to the additional tier one (AT1) market on Tuesday, revealing the extent of investors’ appetite for the asset class.

Demand for euro covered bonds issued on Tuesday by Virgin Money, NN Bank and DZ Hyp has markedly improved from earlier this month, and lead managers have announced a further series of transactions from Royal Bank of Canada, SR Boligkreditt, Skipton Building Society and Liberbank.