Europe’s senior bank bond market was beginning to look moribund at the start of this week.
Deals were getting done but order books had dwindled — order books of between 1.25 and 2 times deal size had become the norm.
It’s certainly not the easiest time to bring a senior deal when big yield thrill seekers are piling into attention hogging AT1 deals.
Investors have become increasingly price sensitive. Everyone was watching how much order books shrank as issuers cranked in the spread. Often it was not looking good.
The heady days of early spring — when subscription multiples of 4 or 5 were the norm — are a world away.
The list of threats facing the senior bank debt market is short but significant. Spreads are nearing this year’s tights, supply has been relentless recently and there is a sense that the next bout of volatility is just around the corner.
“Something always goes wrong in September,” sighed one banker.
But remember: context is everything.
Most FIG issuers are running well ahead of schedule and have already filled their boots with plenty of funding this year.
Their strategy has been to get deals done as early as possible to avoid the risk of volatile markets later — and that strategy has played out successfully.
As king of cringe Alan Partridge explained when his talk show was accused of being moribund, the definition of moribund is something that is about to die ― but this show is merely ahead of its time.