Rabobank

Banco Santander and Rabobank led senior bond supply in Europe this week, both issuing well-received non-preferred deals while Crédit Mutuel Arkéa went for the preferred format. National champions and other strong banks are lining up to issue while market conditions are conducive for deals, but lesser credits remain on the sidelines.

Rabobank has become the first Dutch bank to enter the credit markets in over two months, after launching a non-preferred senior bond on Wednesday. The issuer tacked on a call option, which bankers say are cheap to deliver in the market at the moment.

Banco Santander wasted no time in heading to the non-preferred senior market this week, with investors responding well to the way in which European banks have been dealing with the coronavirus pandemic in their first quarter results.

Spreads in the financial institutions bond market have sprung back to more ‘normal’ levels lately, but issuers may have to wait a little while longer before capitalising on the improvement in conditions, given that many of them are side-lined by earnings blackouts.

Europe’s high grade corporate issuers began the week deploying their recent tactic of tightening spreads aggressively during bookbuilding from cheap starting points, with Elia Transmission Belgium ratcheting in its spread by 60bp from initial price thoughts.

Société Générale continued the streak of French bail-in bond issuance on Wednesday but had to pay a higher new issue premium compared to its compatriots.

Dutch port operator Royal Boskalis Westminster has refinanced a €500m revolving credit facility, as analysts warn that the coronavirus pandemic could see world trade plunge by as much as 34%.

UniCredit has said that it will redeem €2.5bn of tier two capital next month, with regulators allowing banks to manage their debt capital stacks freely during the coronavirus crisis.

The Reserve Bank of New Zealand will prevent its financial institutions from redeeming subordinated bonds during the coronavirus pandemic, putting itself in contrast with other parts of the world, where banks remain free to manage their debt capital as they see fit.

Turkey’s Akbank has refinanced a syndicated loan with tighter margins than its existing facility, as lenders demonstrate unwavering appetite for Turkish debt.

The Bank of England threatened to use its ‘supervisory powers’ on UK banks if they did not agree to suspend dividend distributions this year and stop paying cash bonuses to staff. The instructions do not apply to the equity-like CCDS instruments issued by building societies.

The primary corporate bond market in Europe threw up another blistering day on Wednesday, with seven issuers on screens by mid-morning, bringing the number of deals so far this week to 18, though bond syndicate desks are hesitant to compare this crisis market with the record-breaking issuance in 2009.