Sterling

◆ Nationwide to grow asset size by a quarter ◆ Affords to pay 38% premium thanks to top ranking CET1 ratio in Europe ◆ Strong rally of Virgin Money bonds suggest acquisition likely to proceed

Pent-up demand for first sterling covered deal in three months fuelled the tight outcome

◆ ‘Rare beast’ of a spread drives demand ◆ Deal increased as order book swelled ◆ Cross-currency basis has kept issuance at bay

£500m no-grow trade the first in sterling for three months

Sterling issuance has all but evaporated in recent weeks despite evidence of structural demand from UK investors. Even domestic issuers have snubbed the currency but suggest that some euro funders could be lured back

Bond was sized to ensure secondary performance, and it indeed it has performed

Trickier structure draws in crowd starved of deals

Smaller, weaker FIG issuers bathe in spotlight as anything and everything sells

◆ High yielding deal covered more than nine times ◆ Allows Investec to raise around £100m new capital after factoring buy-back and refi of old AT1 ◆ Strong market sentiment suggests tightening ahead

Premiums vanish as issuers find that anything goes

◆ Company will issue new AT1 and aim to tender its old one ahead of December call ◆ There has been no unsecured sterling FIG issuance since January 15 ◆ Comps’ delta between their tier two and AT1 at 2.39%-2.9%, with Investec tier two indicated at 7.58%

Duration, ESG structure and rating help the company secure more than five times subscribed book