Coronavirus

European investors are looking beyond the coronavirus crisis to put equity capital into companies that they believe can take advantage of its aftermath. However, as economies reopen after lockdown, the damage of the pandemic is becoming clearer, and companies are working hard to convince investors that they are the right horse to back.

BNP Paribas has provided €40bn of loans to corporate clients in the eye of the Covid-19 storm, amid claims that rivals are retrenching. David Rothnie asks if balance sheet support will result in bigger corporate finance fees.

Norwegian cruise and ferry company Hurtigruten has raised a €105m three year loan through JP Morgan and Goldman Sachs, ranking in line with its existing loans and paying 800bp. This follows an agreement on Monday to suspend the company’s leverage covenant and replace it with a cash covenant, an approach that lenders are increasingly using for companies facing sharp revenue stops.

Market participants expect European banks to take a large chunk of funding through the European Central Bank’s Targeted Longer-Term Refinancing Operations (TLTRO III) programme, hitting covered bond supply levels. But issuance in other asset classes should remain unaffected as banks follow through with their funding plans.

Equity capital market participants were in a gloomy mood on Thursday as global equity indices fell in response to the pessimistic tone from the US Federal Reserve. However, European markets remain open for primary capital raising transactions.

Ocado, the UK online grocery delivery platform, has raised £1bn by selling new shares and convertible bonds to fund its expansion plans amid a huge increase in demand for its services during the Covid-19 pandemic.

International Container Terminal Services (ICTSI) raised $400m in the international bond market on Wednesday despite the Covid-19 pandemic challenging the Philippine issuer’s transaction.

The US Federal Reserve’s whatever-it-takes approach to stabilising markets has had an unintended victim: serious discussions about debt relief in the emerging markets.

Peru’s largest financial group Credicorp tapped international bond markets for $500m on Wednesday, maintaining a robust order book even as it tightened pricing by more than 50bp.

CME Group has become the latest exchange to signal a return of open-outcry as it announced the reopening of its Eurodollars options pit.

Tuesday proved to be another good night for UK primary equity capital raisings as Segro, the warehouse company, and insurance group Lancashire issued new shares.

The Republic of Albania won a €3bn book for its bond market return on Tuesday, whittling down pricing to a yield of 3.625% for its seven-year deal.