ING

Markets expressed disappointment following the European Central Bank’s monetary policy meeting this week, but some analysts said that the changes made to the terms of its bank funding schemes represented a real war chest to support lending.

A sharp turn in market sentiment following the announcement of a travel ban by the US has destroyed any hopes for a revival in the corporate bond market, sending high grade spreads 25bp wider as borrowers ducked and covered until at least next week.

Once again, corporate bond markets have staged a recovery after a shutdown of several days as asset prices plummeted in response to the growing coronavirus outbreak. Three industrial companies plus JP Morgan issued bonds in the US on Tuesday, which “all went exceptionally well” according to a head of syndicate in London. Danone launched on Wednesday the first euro corporate issue of the week, paying a high spread but small new issue premium.

Deutsche Bank said this week that it will keep its $1.25bn 6.25% additional tier one outstanding beyond its first call date, having become the second European bank to extend the life of an AT1 for economic reasons.

The recent fall in the price of oil is having a knock-on effect on non-core currency issuance. While oil dependent markets could take a hit as their currencies weaken, some net importers could benefit from a stronger currency and safe haven flows.

On Monday, a day when European stock indices plummeted, hedge fund giant Bridgewater Associates was executing short positions against 37 of the continent's companies, particularly in France, Germany, Spain and the Netherlands.

India’s Tata Steel and Birla Carbon have decided not to syndicate their chunky loans, amid reluctance from the bookrunners to sell down their positions in a slowing market for deals.

Volatility in the financial institutions bond market drove spreads even wider on Monday as a crash in the price of oil added to fears over the extent of the coronavirus outbreak. It was enough to close the primary bond market for the foreseeable future, said market participants.

Vattenfall, the Swedish state power company, issued its second green bond on Thursday, to an enthusiastic reception from investors, who drove the €500m note’s pricing very close to the issuer’s curve.

China Hongqiao Group, China Water Affairs Group and Luxshare Precision has returned to the offshore loan market seeking a total of $800m.

Lloyds Banking Group is giving investors a chance to switch out of a legacy tier two and into a new instrument, without the basic terms of their securities changing.

China Hongqiao Group, an aluminium producer, has returned to the loan market for a $200m borrowing,