Lloyds Bank

UK electricity distributor Western Power Distribution returned to the corporate bond market on Tuesday for its regular annual fourth quarter outing, but this time had to accept a significant new issue premium as it raised £350m.

UK banks are finding safe harbour in the dollar market as investors in other currencies grow nervous that the country will end up with a messy break-up with the European Union. Their reliance on dollars for capital is only likely to increase as Brexit day approaches.

Lloyds Banking Group was selling a new additional tier one in the dollar market on Tuesday, as members of the UK's governing party met for a conference in Birmingham. Investors in UK assets are keenly focused on the risk that the UK exits the EU without an agreement with the bloc.

Moody's has praised Lloyds Bank’s first sterling Sonia-linked covered bond for being an "essential" development that will help to create a market for similar deals and limit disruption from the move away from Libor.

The deal flow of high yield bonds kept rising in euros and sterling this week. Four new issuers joined the already heavy pipeline, including a euro bond from UK premium car manufacturer Jaguar Land Rover.

Lloyds Bank attracted stellar demand for the first Sonia-linked trade from a FIG borrower. The covered bond format was swiftly followed by a senior unsecured deal from Royal Bank of Canada. Bill Thornhill reports.

Lloyds Bank is set to bring the first ever FIG benchmark linked to Sonia on Tuesday, alongside three issuers bringing euro benchmarks and one selling a tap.

While Brexit negotiations continued and banks juggled their contingency plans for various outcomes, two UK corporate issuers successfully accessed the euro corporate bond market this week.

On Wednesday, UK contract catering company Compass Group joined the euro corporate bond market rush with a new 10 year tranche as well as selling a seven year sterling tranche.

Durham University has raised £225m in a triple tranche US private placement, as competitive pricing and the range of available tenors lured the unrated credit to the private market.

The autumn term has definitely begun in Europe’s corporate bond market. BMW and Daimler, which launched deals last week, may have been the scholarship swots who returned extra-early, but this week the whole sweaty gang of issuers is back en masse, and making plenty of noise.

Lloyds Banking Group entered the Swiss franc bond market on Thursday after a seven year absence.