Rabobank

Weaker trading conditions have done little to shake expectations for a new wave of additional tier one (AT1) supply, writes Tyler Davies, with three banks having reopened the market in emphatic fashion this week, issuing €3.1bn-equivalent of debt into more than €20bn of demand.

UPL Corp broke a month-long absence of Indian issuers in the international debt market, raising $500m from investors.

ABN Amro and Commerzbank have proven that the additional tier one (AT1) market is wide open for business, after they clocked up more than €17bn of combined demand for their two new deals on Monday.

Europe’s investment grade companies added to the workload of a rejuvenated but busy green bond market on Wednesday with deals from Alliander and Prologis. But debt bankers believe that, after weeks of emergency funding in response to the coronavirus pandemic, the coming weeks should bring the return of more run-of-the-mill trades.

Barry Callebaut, the Franco-Belgian chocolate maker now registered in Switzerland, launched a Schuldschein on Tuesday offering investors tenors "upon request" alongside two, five and eight year maturities. Robert Bosch did that too, when it reopened the market last month. This is a feature that arrangers say will increase in a post Covid world.

Deal arrangers said on Monday that banks would not be dissuaded from bringing new bond deals to the market, though spread levels have started showing their first signs of weakness following an extraordinarily strong month in May.

Chinese pork producer Muyuan Foods has set the ball rolling on its debut $200m offshore loan.

Rabobank said on Wednesday that it would take advantage of various EU schemes of funding and capital support, as it provided the market with an ad hoc update on its financial position during the coronavirus pandemic.

Credit Suisse has become the first Swiss bank to issue a green bond in the euro market, and has also marketed a rare floating rate note. The trades were testament to improving market conditions and the ability for strong names to sell less common products.

On a busy day for corporate bond issues, with prestigious competing deals including from Nestlé, Swisscom is nevertheless hogging attention with its debut green bond, which comes alongside another green debut, for power networks group Eurogrid.

High grade bond investors had a plethora of trades to pick from on Wednesday, as corporate bankers say May is shaping up to be a breakneck month for issuance.

Rabobank exercised a call option on one of its outstanding additional tier ones this week, with market participants expecting redemption to become the rule rather than the exception during the coronavirus crisis.