France

Sovereign, supranational and agency bond issuers are mobilising their resources to support the fight against Covid-19. The below table details the bonds they have issued, specifically in response to the coronavirus pandemic.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, June 15. The source for secondary trading levels is ICE Data Services.

Caisse Francaise De Financement Local (Caffil) lost €700m of orders after deciding to price its €1bn 10 year covered bond flat to OATs on Tuesday. But in contrast Vseobecna uverova banka (VUB) was able to price comfortably inside fair value largely because its deal offered a substantial pick-up to other covered bonds.

La Mondiale took advantage of a sudden improvement in market conditions this week to strengthen its capital structure with the sale of a new tier two. The French insurer was able to launch its deal 5bp through fair value.

Crédit Agricole has mandated seven banks for its second outing in China's onshore renminbi market. The deal, again taking the form of a senior preferred bond, is expected to price next week.

Caisse Francaise De Financement Local (Caffil) has mandated lead managers for its third covered bond this year and plans to open order books for a euro denominated 10 year transaction, the third from a French issuer since May.

France and Denmark have increased the size of their annual funding programmes as a result of the coronavirus pandemic, with the former making the third upward revision to its borrowing needs in as many months.

A wide gamut of deals across asset classes filtered through the Swiss franc market this week. Gyrations in swaps allowed Crédit Agricole to come flat on euros on Thursday, while also giving investors a great deal on a long end Lausanne trade.

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.

Unédic, the French unemployment agency, raised €4bn on Wednesday with a November 2029 social bond — its third under its new funding programme, which consists entirely of social bonds.

Unédic is preparing to issue its second social bond following its debut trade in the format less than a month ago — itself the biggest social bond ever from any issuer.

The coronavirus crisis may have hit overall covered bond supply prospects, but it has provided a silver lining for some banks — such as Credit Suisse, ING and Commerzbank which have all fared well in the covered bond league tables this year.