Coronavirus

The European Stability Mechanism is ready to issue social bonds to fund its pandemic crisis support to euro area member states, following the publication of its framework on Thursday. The supranational borrower and its sister issuer, the European Financial Stability Facility, have also set out their funding windows for the third quarter.

Banks sitting on €8bn of underwritten debt to finance Advent and Cinven’s buyout of ThyssenKrupp Elevator finally hit the ‘go’ button early this week, unveiling the takeout for the largest European LBO financing in more than a decade. Pre-marketing and pre-placement have helped derisk the exit, but documentation is as weak as on any deal in the pre-Covid market, making the financing a crucial test for the strength of any post-crisis investor resistance, writes Owen Sanderson.

The International Finance Facility for Immunisation (IFFIm) sold its second Norwegian kroner vaccine bond on Thursday, following a donor pledge from the Norwegian government.

Mexican real estate investment trust (Reit) Fibra Uno pulled a proposed dollar Eurobond issue on Wednesday as investors said they believed the issuer may have underestimated the importance of the bid from US Qualified Institutional Buyers (QIBs).

Popular discontent could well rise in many countries as the coronavirus crisis hits the poorest worst of all. In the past, unrest may have only worried government bond investors to the extent that it damaged creditworthiness. But, as market participants become ever more socially conscious, DBRS Morningstar’s Nichola James says that we can also apply an ESG (environmental, social and governance) lens to it.

Skipton Building Society announced on Wednesday that it was looking to buy back one of its senior bonds. The tender offer will give investors a premium over secondary market and help the issuer optimise its liability base.

Coöperatieve Rabobank launched a 10 year covered bond at a spread of 7bp over mid-swaps this week, leaving a small new issue concession for investors. The deal also underlined the recent recovery of credit spreads amid the coronavirus pandemic.

Pepkor, the South African retailer, raised R1.9bn ($110m) in a sale of new shares on Tuesday night to reduce leverage and to prepare it for the future impact of the Covid-19 pandemic.

Mexican real estate investment trust (Reit) Fibra Uno’s plans to return to bond markets were shaken on Tuesday when the issuer delayed pricing “as part of company protocol” when an earthquake hit the country.

Uruguay-headquartered Navios South American Logistics on Tuesday notched a $500m 10-year bond that left the company with a far more comfortable debt maturity profile. But Navios had to improve terms for investors — and wait a week after it first announced the issue — to get the refinancing done.

Indomobil Finance Indonesia has launched a $240m borrowing into general syndication, changing its approach to the fundraising after market sentiment improved.

The UK may be loosening social restrictions as the rate of coronavirus infections abates, but the Bank of England and the government cannot let up the fight against the economic and market impact of the virus.