UniCredit

On Wednesday, US electrical appliance manufacturer Whirlpool became the second investment grade corporate borrower to pull a deal in a week. German energy company Innogy and Whirlpool both found the corporate bond market tough going on Wednesday, despite having employed two-day marketing strategies. Whirlpool, however, took the hardest hit.

As investors take shelter from the incoming Italian administration by selling the capital instruments of the country’s banks, one security outperformed this week. UniCredit’s convertible and subordinated hybrid equity-linked securities (Cashes) traded up at the beginning of the week as investors assess how likely it is that the bank will have to remove the instrument from its capital stack.

Italian bank debt was in the firing line this week, after investors became fearful of the country’s political situation for the first time since the election in March.

Investors moved to reduce their positions in Italian bank bonds after a leaked document on Tuesday night showed that the Five Star Movement and Lega parties were considering introducing a number of controversial policies should they enter into a governing coalition.

The confusion over UniCredit’s Cashes notes is not a one-off. Uncertainty over regulatory capital eligibility affects the biggest banks in Europe, and it is unlikely to go away soon.

Hedge fund Caius Capital caused a stir this week with its assertion that a swathe of UniCredit’s capital is receiving the wrong regulatory treatment. The bank resoundingly denied it was in trouble, but the dispute has shone a light on the unclear complexity of the treatment of legacy instruments.

Hedge fund Caius Capital has written to the European Banking Authority claiming that a legacy equity-linked instrument issued by UniCredit counts incorrectly as regulatory capital. The fund believes this makes the bank’s ordinary shares ineligible as capital too.

Vonovia, the largest residential property company in Germany, raised €1bn on Thursday night to finance its proposed acquisition of Victoria Park, the Swedish property company.

German car company Daimler raced from one side of the Atlantic to the other this week to raise €6.7 equivalent from 10 tranches of bonds with tenors from two to 10 years.

On Thursday, German car manufacturer Daimler made its second visit to the corporate bond market with a €2.25bn dual tranche offering. This followed a $4bn seven tranche issue on Monday.

Supranationals are making the most of demand in Romanian lei, picking up short dated funding in the currency.

Puma Energy has closed a $1.37bn syndicated loan, with commitments from 48 banks helping the company boost its fundraising.