BBVA

BBVA’s Mexican arm will look to sell Basel III-compliant tier two debt to fund a buy-back of old style subordinated bonds after launching a tender offer on Wednesday.

BBVA was marketing an additional tier one bond on Wednesday, making use of the favourable conditions that other issuers have found for similar instruments in the dollar market, while BNP Paribas, Bank of Nova Scotia and Bawag kept euro investors busy.

Europe's corporate bond market opened emphatically for business on Tuesday, as seven issuers banished all memories of the summer holiday. Despite there being plenty of choice for investors, demand was high across the board. Multiple deals were two to three times oversubscribed, while the largest, a €3.5bn four trancher from Siemens, the machinery maker, was nearly 4.5 times covered.

Market participants expect more banks will now want to print Kangaroos after investors on a search for yield poured into UBS's additional tier one (AT1) deal on Tuesday. The syndication, which surprised those involved after it managed to shave 75bp off its initial pricing guidance and attract A$4bn ($2.71bn) of orders, suggested a market ripe for a deal spree.

Issuers are set to gravitate towards selling higher yielding regulatory debt in the post-summer issuance window, so that they can attract investors and compensate for low overall interest rates. But FIG bankers are unsure what concessions will be needed to get deals away.

Investors hoping for new investment grade corporate bonds this week may be disappointed, as widening spreads and falling equities make the market less tempting for issuers.

Mexico responded to the lower rates environment on Tuesday with an opportunistic $3.56bn liability management exercise, shrugging off any credit worries to issue at a very slim concession.

Mexico showed that even trickier credit stories could take advantage of the borrower-friendly rates environment, surprising many with a $3bn liability management exercise just two weeks after finance minister Carlos Urzúa resigned.

Cofco International, a commodities trading unit of China’s agri-products company Cofco, has increased its sustainability-linked loan to $2.3bn after receiving commitments from 21 lenders.

Real estate investment trust (Reit) Fibra Terrafina sold $500m of 10 year bonds on Monday, with hefty tightening allowing the borrower to price closer to its largest Mexican rival than expected.

Two Mexican companies announced bond roadshows on Monday, in combination with buybacks of 2022 notes, as Latin American borrowers continue to try to use liability management to take advantage of low rates to refinance debt.

Corporate bond issuance in Europe has slowed, though demand remains strong, as evidenced by new issues on Monday for A2A, the Italian multi-utility, with a debut green bond, and Logicor, the warehouses group. Bankers expect appetite to remain steady but for the pace of issuance to be more sedate than in recent weeks.