Luxembourg

The first products under the renminbi qualified institutional investor (RQFII) programme should launch as early as the first half of next year, according to Camille Thommes, director general of the Association of the Luxembourg fund industry (Alfi).

After waiting more than six months, Luxembourg has obtained its first licence under the renminbi qualified foreign institutional investor (RQFII) scheme. Industrial and Commercial Bank of China (Europe) received an approval on November 2 and is aiming to get a quota within the month.

Three issuers launched covered bond benchmarks in euros this week, down from nine in the previous week, as borrowers anticipated an improvement in market conditions and lower new issue concessions.

NordLB Luxembourg Covered Bond Bank issued a €500m three year Lettres de Gage Publiques on Thursday. The deal offered a 24bp premium to where NordLB Germany trades, and therefore attracted a comfortable level of oversubscription despite its lack of compliance with the capital requirements directive (CRD) covered bond definition and its split rating.

Luxembourg’s local fund industry association published a guide for institutions who want to join the RMB qualified foreign institutional investor (RQFII). It comes after the country was awarded a quota of Rmb50bn in April 2015.

The European Stability Mechanism, which has made a number of recent hires including newly created senior positions, is continuing to reshape its management structure with another appointment.

Boutique asset manager Sparinvest will consolidate two of its high yield bond sub-funds into its existing Corporate Value Bonds on September 25, as the company reviews its product range.

Citigroup has hired Deutsche Bank’s head of equity capital markets for France to build its market share across France, Benelux and Switzerland.

The most eagerly awaited of all quota approvals came on Thursday with the news that the People's Bank of China (PBoC) had finally granted a Rmb50bn ($8.6bn) renminbi qualified foreign institutional investor (RQFII) quota to Luxembourg, a world leading domicile for investment funds.

Clearstream, the international central securities depository of Deutsche Börse Group, is making further progress in its Asia strategy by opening offshore renminbi cash correspondent bank (CCB) accounts with Chinese banks based in Frankfurt, Luxembourg and Singapore.

NORD/LB Covered Finance Bank is expected to open books for its inaugural five year €500m Lettres de Gage Publiques on Monday after mandating leads on Friday. Bankers expect a less busy week ahead, but believe there is scope for one or two other deals to be announced at short notice. Market conditions remain strong and recent issuance, such as UniCredit’s conditional pass through, have all performed.

NordLB Covered Finance Bank (NORD/LB CFB) has mandated leads for a European roadshow to sell its first benchmark sized covered bond under the recently amended Luxembourg legal framework. Though this deal will be backed by public sector assets, the law allows for a much wider pool of movable assets, suggesting there is potential for more innovative deals to follow.