Wells Fargo Securities

The cost of funding in euros or sterling has swung back into favour for dollar-focused financial institutions in recent months, heralding the return of several North American banks to the market, including Morgan Stanley and Wells Fargo.

Wells Fargo attracted plenty of interest in a new five year senior bond in euros on Wednesday and was able to squeeze all of the new issue premium out of the transaction, its first in euros for two years.

On Friday, JP Morgan and Wells Fargo posted falls in investment banking revenue for last quarter. But debt underwriting business was a bright spot for both banks.

The financial institutions bond market was confined to a handful of small trades this week, as Wall Street self-funders prepared to pull the trigger on multi-billion trades after reporting season.

Sentiment in the dollar corporate bond market remained upbeat this week, even after jumbo deals from Broadcom and Saudi Aramco traded softly.

Bank of China sold another blockbuster Belt and Road transaction on Wednesday, raising $3.8bn across eight tranches of notes in five currencies across five bank branches, It was the largest transaction sold under the BRI label.

French construction company Vinci took advantage of a lull in supply and favourable financing conditions to make its long-awaited dollar market debut.

Four new corporate bonds hit the market on Wednesday. In a change from recent days, all the deals were of moderate size and single tranched. Terna, the Italian grid operator, and Banque PSA France were typical in launching €500m no-grow deals. Book sizes diverged strongly, with those two issuers getting heavy oversubscription, while Aroundtown and Voestalpine had much less.

Hong Kong’s AIA Group looked to the US market for its latest $1bn bond sale on Tuesday.

Berry Global said on Monday that it has added more banks to the financing for its purchase of UK packaging group RPC, one of the year’s hotly anticipated new money leveraged loans.

Tim Sloan, CEO and president of Wells Fargo, has announced his retirement, after several years of regulatory and legal pressure on the bank as a result of mis-selling revelations. Sloan was a Wells veteran; the US bank will now not choose one its own staff as his permanent replacement.

The European leveraged finance market is heating up, as long-awaited deals for the buyouts of UK plastics company RPC and German online listings firm Scout24 break cover. The two chunky deals will deliver much needed new money supply after a sluggish start to the year.