UK

Capital Markets Union, one of the European Commission's most lauded initiatives, is likely to be one of the early casualties of the UK's decision to exit the European Union.

There are those who believe a vote for the UK to leave the European Union represents a chance to peel back onerous regulations on business and finance. Those people are in for an unpleasant surprise.

Barclays has hired a managing director from Morgan Stanley to join its distressed debt business.

The market reaction to the UK’s surprise decision to leave the European Union has been immediate with stocks falling, the pound weakening and the country downgraded by international rating agencies. But market participants are worried that the worse has yet to come and London could be set to lose its shine as a premium renminbi hub.

Balanced mutual funds and risk parity funds were among those most wrong-footed by the UK voting reject EU membership last week, according to equity analysts, while leveraged exchange traded funds amplified the market fallout of the vote.

Cape, the UK industrial services company, has refinanced a £295m revolving credit facility, adding two banks to the syndicate and extending the maturity by two years.

Loans bankers are holding out for details of the divorce agreement between the UK and the EU to surface before assessing the full impact of Brexit on their market. But in the short term, they expect a hit to already low volumes.

The European Commission is expected to include extra funding for the European Banking Authority in an upcoming budget proposal to help the regulator pay for an expected relocation to the continent.

UK packaging firm Linpac is expected to launch €175m of loans in the coming weeks, a deal it has been marketing since May. The deal could be the first for a UK borrower since the country voted to leave the European Union in a referendum last Friday.

Market participants struggled to assess the fallout from the UK's EU membership referendum on Monday, with fears over rates, politics and portfolios all heaping further pressure on subordinated bank debt.

What began as a week of turmoil for European credit and equity markets amid Brexit uncertainty is ending on a full circle return with no immediate signs that that the UK will begin a formal exit from the EU soon and amid rumours on Thursday that the ECB will relax the terms of its bond repurchase programme.

The covered bond market was almost impassive to the wider credit market turmoil that followed the UK vote on Thursday to leave the European Union, with the primary market likely to restart in early July. But one major investor said the UK's decision will be worse for peripheral economies as it will trigger a lot of uncertainty about the EU as a whole.