UK

As UK voters made their way to the polling stations, Europe’s investment grade corporate bond market geared up for a frantic Friday, when the referendum’s results are announced.

A British vote to leave the European Union could lead to the reopening of a spat between the Bank of England and the European Central Bank over clearing euro-denominated trades. Last year, the UK won a court battle in the European Court of Justice, keeping the right to clear euro-denominated trades outside the eurozone.

Investors have agreed to a number of changes to Nationwide Building Society’s covered bond programme. The publication of voting results in full is in line with the European Central Bank’s recommendation — but something that is still rarely seen in the market.

Markets watchers in Asia said they were optimistic, as GlobalCapital Asia went to press on Thursday, that next week would be a return to business as usual, given their widespread expectations that the UK would choose to remain in the European Union. But some warned that, irrespective of the outcome, currency risks could spill over to other asset classes, adversely affecting bonds and equities.

With European corporate bond issuance unsurprisingly non-existent on Wednesday, spreads have held steady in secondary markets ahead of the UK’s referendum vote on its EU membership.

The first of three political risks to the stability of the capital markets faced passed without causing disruption this week, as a mechanism attributed with calming fears amid the eurozone sovereign debt crisis was declared legal.

From a regulatory standpoint the spread level of UK covered bonds suggests a UK exit from the European Union has been priced in. However, given uncertainty over how the process of leaving the Union would be finally completed, it is likely UK bonds will remain unloved.

FIG spreads failed to grind tighter again on Tuesday, as investors remained nervous about the result of the UK’s referendum on EU membership this Thursday.

Barclays has made several senior appointments to its Asia Pacific and EMEA syndicate teams, combining its bond and loan platforms.

Barclays has restructured a book of controversial local authority and housing association loans to waive its rights to amend the interest rates on the loans at given periods.

This Loan Ranger has learnt a valuable lesson about what happens when you go on holiday and leave a vegetarian in charge. With Silver holding the reins, so to speak, things took a decidedly environmental turn…

Peripheral covered bond spreads were marked tighter on little volume on Monday, in line with a general improvement in risk appetite across the credit spectrum after a number of polls showed a swing in favour of the UK remaining in the European Union. But with opinion more evenly balanced than ever, the market has probably overreacted.