SEB

Danish agency KommuneKredit made one of its infrequent visits to the Swedish kronor market on Wednesday. With many issuers preferring the short end of the market due to volatility from the coronavirus pandemic, the agency instead opted to tap a pocket of demand at the long end of the curve.

Fashion retailer H&M has signed a €980m revolving credit facility to sit alongside its existing main bank line, as the Swedish company becomes the latest to turn to the bank market to bolster its finances during the coronavirus pandemic.

Svenska Handelsbanken was the only financial institution to issue senior debt in euros this week. The issuance came at a time Swedish banks have been granted an extension of two years to comply with regulatory targets for MREL debt, which might make a short-term dent in issuance.

Financial institutions bond bankers are struggling to build a new pipeline of issuance, despite a significant improvement in market conditions this week. Not only are banks entering blackout periods ahead of first quarter results, many of them are also happy to wait before seeking to raise new funding.

Mandates are rolling in for high grade corporate issuers, as syndicate bankers disagree about whether the blistering pace of the market can last.

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.

Extraordinary times call for extraordinary capital markets activity. The North American corporate bond market funded a staggering record $194bn of investment grade issues in March while Europe has also been busy — shaking up the league tables and yielding a surprise windfall for the very largest investment banks.

Mondi, the paper company based in the UK and Austria, raised €750m on Friday to refinance its €500m bond maturing in September, and put some extra cash by in case of trouble, with a bond issue that it went ahead with on a down day for equities, even as some other companies opted not to issue.

The euphoria that infused Europe’s corporate bond market from Tuesday to Thursday has cooled somewhat, although investors are still open for business. Bankers had said on Thursday that Friday would bring an interesting crop of deals, but there is only one, for paper company Mondi, rated Baa1/BBB+.

A trio of UK companies drew down on their revolving credit facilities this week, as firms in the country build up their cash piles despite an unprecedented financial support package from the government.

Aareal Bank has become the latest European financial institution to extend the life of an additional tier one instrument, as turbulent market conditions make it harder for banks to decide how to manage their capital structures.

Despite the terrible effects of the coronavirus pandemic on capital markets, the MTN market is open and functioning.