Rabobank

Banca Monte dei Paschi di Siena wrapped up its second deal of the month on Tuesday, capping off a busy period for Italian deal flow in advance of important regional elections.

Investors flocked to a rare offering of restricted tier one (RT1) capital from Phoenix Group Holdings this week, allowing the insurance company to tighten pricing by 37.5bp. The bonds will form part of the financing for the UK firm’s acquisition of ReAssure Group from Swiss Re.

Landesbank Baden-Württemberg (LBBW) became the first issuer of non-preferred senior bonds in green format in sterling this week. The German lender took advantage of favourable market conditions to print in line with other recent sterling issuers.

Investors did not want to miss out on the senior bond marketed by KBC Group on Tuesday, as the issuer seized on strong market conditions to extend its credit curve and launch a deal at what many saw as fair value.

Banca Monte dei Paschi di Siena was marketing a new senior bond in the euro market on Tuesday, a matter of days after it completed its capital raising plan with a tier two sold at 8%.

Landesbank Baden-Württemberg (LBBW) is set to become the first issuer of green non-preferred senior paper in the sterling bond market, as well as the first financial institution to include sustainability ratings in a new deal mandate.

Navigating the covered bond market will not be without its challenges in 2020. The Targeted Longer Term Refinancing Operation (TLTRO), European Central Bank deposit tiering and the Covered Bond Purchase Programme have collectively distorted the market, but added to this concoction is the impact of negative interest rates. Against this backdrop issuers, investors and investment bankers gathered in Munich in November to discuss the outlook for covered bonds. It is likely that new issue premiums will gradually tighten, but the path is unlikely to be smooth. January is typically the busiest month, but in 2019, issuers that funded this early paid the highest spreads. And, with the ECB expected to buy in the region of €4.5bn covered bonds a month, issuers will not feel compelled to move early. But the ECB monetary policy has unwelcome implications. Covered bonds have begun to lose value against government bonds, and this will extend if the ECB is unable to loosen restrictions on government bond purchases.

Foreign and domestic banks flocked to the UK this week as they sought to take advantage of stellar funding conditions in the sterling market. Bankers said this was the first chance issuers had to benefit from opportunities in the currency following December’s general election, which removed a lot of short-term uncertainty around Brexit.

ABN Amro and Deutsche Bank opened books on new senior deals in the sterling bond market, with bankers recognising that the currency is 'working very well' for international names.

BNP Paribas and Danske Bank were looking to raise non-preferred senior debt in the sterling market on Tuesday, with the cost of funding in the currency having fallen into line with euro pricing levels.

Rabobank opened books on its first ever non-preferred senior deal in sterling on Monday, as it sought to take advantage of a general lack of a supply in the currency over the course of the last couple of months.

TrailStone Group, the gas and power trader and investor based in London, has closed the year with a €150m revolving credit facility, which complies with the Green Loan Principles.