ABN Amro

The European Central Bank is overstepping the mark with its investment grade corporate bond buying and must start easing off, or it risks detaching the market from economic reality, market participants said this week. Mike Turner reports.

Commerzbank did not pay a premium to launch its new additional tier one (AT1) this week, as it found strong demand at the long end of the curve. The bank was returning to the market just three months after its last deal in the format.

KPN, the Dutch telecommunications company, made its first outing in the senior bond market for four years on Monday. One lead manager expected the trade to give the issuer’s curve a strong lift.

Royal Schiphol, the Dutch airport operator, brought a dual tranche conventional and green bond with a small to flat new issue premium on Tuesday. The issuer opted to make the longer 12 year tranche green, which bankers say is indicative of lengthening maturities in the typically mid-tenor corporate green bond market.

Senior deals from Banco de Sabadell and Mediobanca underlined the pricing benefits of printing in green formats this week, with both coming inside conventional curves. Other issuers could be tempted to follow.

Royal Schiphol, the Dutch airport, brought a dual tranche conventional and green trade with a small to flat new issue premium on Tuesday, as even issuers in sectors worst hit by the pandemic show it’s possible to garner more investor interest by linking their debt to environmentally conscious uses.

Erste Group Bank kept the tap open on subordinated supply in the euro market this week with a €500m 11-year non-call six deal.

The bank bond market burst back into life on Monday, with BNP Paribas and Commerzbank shedding light on favourable pricing conditions in euros following the summer break.

ABN Amro has become the 18th bank to call an additional tier one (AT1) in 2020, as refinancing conditions continue to improve, despite the impact of the coronavirus pandemic.

Additional tier ones have been left behind in a recent rally across European credit markets, leading some analysts to champion the asset class as a rare source of yield.

Royal Bam group, the Dutch construction company, has negotiated a waiver on its loan covenants before they were due to be tested this week. Some loans bankers say that similar agreements are expected to be made across multiple industries for the rest of the year.

The coronavirus crisis has reshaped many aspects of finance, but not the line-up of top investment banks. It does appear to have pressed some firms into sharp decisions, though.