UK

Banks are gearing up to reverse a disappointing year for additional tier one bond issuance. Royal Bank of Scotland and Standard Chartered led the charge this week, and there may be no stopping the turnaround as prices rise and greater regulatory clarity puts investors' minds at ease.

The rally in sterling covered bonds still has some way to go. With another UK rate cut likely and negligible supply, spreads should at least halve in the next few months.

The Bank of England’s Gilt buying programme ran into difficulties on Tuesday, securing only £1.12bn — £50m short of its target — despite offering to pay well over market value.

Starwood European Real Estate Finance, the Guernsey domiciled closed-end investment fund focused on real estate debt, has completed a £73m ($94.78m) share placement on the London Stock Exchange.

With sterling spreads tightening and foreign investors showing increasing interest, both HSBC and BNP Paribas looked to take advantage of funding opportunities in the UK bond market this week.

After Shell printed its €2.25bn dual tranche bond on Wednesday, market participants are expecting an empty two weeks for issuance, before activity restarts at the end of August. That’s for euro houses though. Those banks with sterling operations are enjoying the fruits of Bank of England governor, Mark Carney’s anticipated corporate QE programme, which has accelerated pricing compression in the market. Sterling deal flow can keep pace throughout August it is hoped.

Sterling bond yields may be sinking but that has rekindled investor demand for UK bond exchange traded funds at the expense of Gilts, according to IHS Markit.

Steinhoff has agreed a loan with one new lender and bumped up its bridge facility with Crédit Agricole and UniCredit. The steps were taken to support the retailer’s increased offer for the UK’s discount retailer Poundland.

Support for the London Stock Exchange and Deutsche Börse’s merger plans has solidified among the German exchange’s shareholders, with more than 75% having tendered their shares — crossing the original threshold set by management.

The rally in sterling covered bonds still has some way to go. With another UK rate cut and limited supply, spreads should halve in the next few months.

Morrison Utility Services launched on Wednesday £170m of loans to early bird syndication, bringing supply to a market where sterling issuance has dropped more than 55% year to date.

Standard Chartered attracted huge demand for a Reg S additional tier one note on Thursday, clearly displaying the asset class’s recovery over the past two months.