UK

UK investment firm Melrose will rely on relationship banks for $1.25bn of debt to support its acquisition of Nortek, as the loan market continues to support deals in the wake of the Brexit vote.

Melrose Industries, the UK company that aims to buy, improve and sell underperforming industrial businesses, will conduct a heavily dilutive £1.655bn rights issue, cheering equity capital markets bankers who had feared months of weak activity, especially in the UK, after the shock of the Brexit referendum.

While Bank of England governor Mark Carney took an admirable step to encourage UK bank lending on Tuesday, the syndicated loan market does not need more bank liquidity, it needs gutsy treasurers.

Gold and other precious metals have been major beneficiaries as safe haven investments in the wake of the UK’s Brexit vote, with gold futures this week hitting their highest level since July 2014. But some believe the wider precious metals sector has overshot.

The Bank of England cut the UK’s countercyclical buffer requirement with immediate effect on Tuesday, softening risks associated with payments on additional tier one (AT1) debt.

Merger talks between the London Stock Exchange Group and Deutsche Börse remain on course despite the United Kingdom’s recent vote to leave the European Union, with LSEG shareholders on Monday almost unanimously approving the plans. But comments from the German exchange this week suggest there are tough talks ahead on where to locate the merged group's holding company.

Ashurst has picked up a new partner for its finance division, following the recent appointment of a former loans banker from Royal Bank of Scotland.

The UK subsidiary of Santander issued a £500m three year floating rate deal on Friday in an exercise that suggested UK banks still have good access to wholesale funding. The deal comes as several banks line up with euro benchmarks next week, and amid growing signs that a further expansion of quantitative easing is on the way.

Bankers and lawyers have been grappling with likely consequences of the end of euro clearing in the City of London — specifically, will their trading floors have to follow clearing into the eurozone? The UK chief executive of one major French bank said that the firm had received differing legal advice on this point, and that it was a "crucial" question.

Syndicated loan documentation has been in the spotlight since the UK voted to leave the European Union, with some market participants asking whether Brexit-related clauses might be invoked to block deals, and others questioning the continued use of English common law.

Those of us who stayed up to watch the Brexit television coverage knew that in a few hours’ time the June 24 trading session would go down in history. The mainstream media were inevitably obsessing about the post-Brexit collapse in sterling, but the credit markets were focused on the Markit iTraxx indices. Big moves were expected by market participants, and they weren’t disappointed.

The UK Debt Management Office has stressed that a plunge in Gilt yields following the UK’s vote to leave the European Union will not affect its strategy, as comments by the Bank of England governor sent rates tumbling further on Thursday.