Lloyds Bank

Lloyds Bank returned to the sterling covered bond market on Monday with its first deal of 2020. It capitalised on the scarcity of short-dated Sonia supply with the first three year bond from a UK issuer in six months, which helped it to price its deal marginally inside fair value.

Syndicate bankers argue that financial institutions will need to pay a premium to access the bond market in the next couple of weeks, as investors fret about the potential impact of the outbreak of coronavirus in China.

Greater clarity over Brexit is allowing UK banks to enjoy a warm reception in euros at the start of 2020, with Lloyds Bank Corporate Markets following two of its peers into the market this week.

Nationwide Building Society launched a three year preferred senior bond in sterling on Friday, with the trade’s success coming as 'no surprise' amid a favourable backdrop in the currency.

High grade corporate names kicked off the 2020 sterling market in style this week, with big books and eye-catching trades for the University of Oxford, Clarion Housing and Ireland's Electricity Supply Board.

UK private placement advisers and agents are keen to speak to North American investors about their appetite for debt from UK local governments, seen by many as the next source of growth for PPs in Europe after the central government raised the rate at which it lends to them.

The UK's Clarion Housing Group, a housing association, got a rapturous reception from the sterling bond market on Wednesday, which allowed it to increase its green bond and price it flat to its curve.

The Sonia-linked covered bond market is showing signs that it is 'maturing', with Commonwealth Bank of Australia launching a new deal in the format on Tuesday and Coventry Building Society looking to follow in the footsteps of two of its compatriots early in 2020.

Issuers rushed to open the euro covered bond market this week. Trades from ABN Amro, Erste Group and LBBW showed that investors are ready to put cash to work, but higher new issue premiums suggested that issuers were taking a 'conservative' approach at the beginning of the year.

Nationwide Building Society issued the first sterling covered bond of the year on Friday, without needing to pay any premium over the tight trading levels of its existing bonds.

The Bank of England said it will increase the countercyclical buffer by 100bp for UK banks after disclosing the results of its latest stress test this week. As the sector performed well in the test, the new capital requirements are being interpreted as a ‘Brexit buffer’ to help institutions withstand the risk of economic turmoil at the end of 2020.

Investec has entered the loan market for the third time this year, taking a $450m two year term loan from a range of international lenders.