Lloyds Bank

Bankers and investors believe Europe’s election schedule will drive up rates on new high yield bonds and increase the attraction of leveraged loans to issuers — even as Together Financial’s new sterling offering kept the market alive.

Swiss petrochemicals firm Ineos priced a €4.5bn-equivalent four tranche term facility refinancing at the tight end of guidance on Monday, taking advantage of a leveraged loan market where abundant demand and scarce new paper is grinding down margins and encouraging a wave of refinancings.

BP Capital Markets brought a £400m bond to the market on Thursday that was priced in line with initial price thoughts, causing disagreement between bankers on and off the execution about where marketing levels should have started.

Ineos, the energy conglomerate, launched a refinancing and repricing loan deal on Monday afternoon, extending the run of issuers coming back to cut funding costs in the market.

Although the European high yield market priced only one sterling issuer this week, some debt advisers say the pipeline is building up.

Following Lloyds Bank's creation of the "CB markets" division, combining trading with capital markets origination, James Garvey, the division’s boss, has laid out the management team for the new structure.

Discount retailer B&M will launch on Tuesday its £250m debut high yield bond in a so far ‘hard Brexit’-proof sterling market — but some investors are already warning about a potential glut of supply.

Rating: A3/A-

Thames Water, the UK water supplier, shrugged off currency market nerves over UK prime minister Theresa May’s speech about the UK's departure from the EU on Tuesday to engage sterling bond investors with a £500m dual tranche offering.

The enduring nature of sterling covered bonds was underscored again this week with deals issued by Lloyds Bank and BayernLB taking this year’s total in the UK currency to six.

Covered bond deals issued this week by Société Générale and Erste Bank showed that there is still good demand for bonds issued by national champions, even in the more difficult longer tenors.

UK premium car maker Jaguar Land Rover on Thursday sold its first euro bond at one of the lowest coupons seen in the high yield market in the last two years.