Investor-Issuer Profiles

Another Spanish ABS tender hits screens Banco Cooperativo Espanol has joined the long list of Spanish banks tendering for ABS bonds. Meanwhile, Catalunya Banc bought back half of its targeted €500m of ABS bonds, albeit at cheaper levels than in its first tender earlier this year.

DIB $500m sukuk trades up after book covered four times Dubai Islamic Bank’s newly issued $500m five year sukuk has met with a strong secondary market reception, trading up as much as half a point above par since it was priced on Tuesday afternoon. DIB priced the dollar Reg S benchmark sukuk at 365bp over mid-swaps, 10bp inside initial guidance.

Domestic scramble for rare Landshypotek sub debt Landshypotek issued its first sub-debt capital note in five years on Tuesday, a Skr500m dual tranche 10 year non-call five bond that included a regulatory capital event call that the issuer had not incorporated in any previous subordinated debt issue.

KEB mulls dollar bond, plots roadshow Korea Exchange Bank will be on the road next week for a series of meetings with investors in Asia, UK and US to gauge their appetite for a potential international bond offering.

ÖVAG targets pref for capital generation Austria’s ÖVAG launched a buyback and consent solicitation on a preferred security on Tuesday night in a bid to improve its capital position. The borrower is offering to buy back a €250m fixed to floating rate preferred security at 39% of par.

Santander prints largest CP clip in over a year Santander braved concerns over the Spanish banking sector today by printing its largest piece of commercial paper in more than a year.

Time running out for FIG senior issuance With summer holidays on the horizon and credit spreads beginning to widen once again, the window for financial sector borrowers to tap the market is slowly closing. Bankers on Wednesday said that senior would take a back seat even as the corporate and covered bond markets saw primary supply, arguing that recent developments had further damaged sentiment towards FIG borrowers.

VTB to tap structured interest with equity-linked notes VTB is planning to issue equity-linked notes in dollars and in roubles, to be internationally and domestically placed in MTN format on a reverse enquiry basis.

Dubai Islamic Bank launches benchmark sukuk Dubai Islamic Bank has launched its five-year dollar Reg S benchmark sukuk at 365bp over mid-swaps, 10bp inside its 375bp initial price guidance. The deal is expected to price in the early afternoon on Tuesday, UK time.

Risk-off movements concentrated in front end, say bankers European banks’ curves are steepening up to three years and flattening beyond that point, suggesting investors are concerned about the short term stability of the continent’s banking sector but more confident about the long term, bankers told EuroWeek on Tuesday.

Standard Chartered reaches Rmb1bn ECP summit with third clip Standard Chartered is claiming an industry first after topping Rmb1bn ($158.2m) in outstanding euro commercial paper volume and is positioning itself as the largest issuer of renminbi ECP from London.

VTB sets sights on Sing dollars and sukuk this year VTB, a Russian bank that has worked hard to expand its funding sources over the last few years, is not yet done with diversification. Not only is it planning to tap the Singapore dollar market before the summer holiday period in order to push out its curve in that maturity, but it also has plans to place a deal in Swiss francs and to showcase the possibilities for Russian issuers in the sukuk market before the end of the year.

Beazley uses excess liquidity to buy back LT2 Specialist insurer Beazley has bought back £30m of a £150m deal in a liability management exercise that was designed to take advantage of excess liquidity.

Senior looks to covered bonds, corporate sector for lead Spreads began to inch tighter in senior unsecured on Monday, leading syndicators to look to the covered bond market and the corporate sector to lead the way and help break the funding deadlock of the past 11 days. While there was no activity in senior, Clydesdale mandated for a covered bond roadshow, raising hopes that senior could benefit from a better tone in that market.

Sukuk holders approve Gulf Finance House restructuring Bahrain-based Islamic investment bank Gulf Finance House (GFH) has gained approval from creditors to restructure its debt, with the outstanding $110m of a looming sukuk maturity extended to June 2018. In addition, GFH has obtained a two year grace period on the notes, with repayment starting in 2014.

Saudi Fransi’s bulging sukuk book shows Islamic finance power The Islamic bond market this week gave the clearest demonstration yet of its insulation from global turmoil, with Banque Saudi Fransi receiving an order book of over $4bn for its aggressively priced debut benchmark sukuk.

OP’s stellar jumbo proves covered market strength in appalling week for bonds Finland’s OP Mortgage Bank shrugged off an appalling market backdrop and ended a two week covered bond drought with a stellar benchmark trade on Wednesday.

Vietinbank brings Vietnam lenders to dollars Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) finally pushed through with its $250m debut in the international bond market late last week.

Spain rounds up its banks for €35bn loan to settle local debts A syndicate of 26 Spanish lenders has provided a €30bn syndicated loan to allow Spain’s regional and city governments to pay off debts to their suppliers.

Money market funds may drop Moody’s amid ‘frustration’ As Moody’s was preparing its downgrades of 16 Spanish banks on Thursday, some money market funds were privately voicing concerns about the swathe of ratings reviews and stating that they may look to drop the credit rating agency, according to bankers.

Volatility dampens covered hopes despite yield hunger Real money accounts are desperate for financial institution paper — but only from the right names. As volatility continues to rock the markets, European covered bond and senior unsecured bankers tried to deduce issuance prospects in the light of OP Mortgage Bank’s successful trade on Wednesday (see separate story). While some are hopeful, others remain extremely doubtful.

Tesco Bank hits record with £200m retail deal Tesco Personal Finance this week sold a £200m 5% 8-1/2 year retail deal, breaking the record for the largest fixed rate deal to list on the London Stock Exchange’s retail trading platform.

Cyprus Popular looks at capital with LM, rights issue plans Cyprus Popular Bank — formerly known as Marfin — made strides this week towards filling a big capital hole ahead of the European Banking Authority’s deadline for a 9% core tier one ratio by the end of June, with a liability management exercise and plans for a rights issue.

Arkéa hits 54% participation rate France’s Crédit Mutuel Arkéa released take up results on its cash tender on a €250m CMS-linked tier one security this week. Investors tendered €135.4m — 54.2% of the deal outstanding — for cash at 60% of par.

Delta Lloyd eyes sub deal Delta Lloyd Life is meeting investors in the coming days with an eye to a debut subordinated transaction.

Goldman Sachs ‘reworking sukuk plans’ Goldman Sachs still intends to proceed with a first tranche of its controversial $2bn sukuk programme, Islamic bankers believe.

Bank of Georgia braves volatility to roadshow bond Bank of Georgia has mandated Bank of America Merrill Lynch, Credit Suisse and JP Morgan to arrange a series of fixed income investor meetings.

EuroWeek Bond Awards - the Full Results EuroWeek celebrated 25 years of bond market coverage on Tuesday May 15 with a gala dinner to honour the most impressive banks, bankers, borrowers and funding officials in the market today. In the EuroWeek tradition, we asked market participants to vote for the award winners and below is the full list of the award winners and runners-up. Many thanks to all who joined us at Guildhall for making the night such a special one, to all who voted in the Awards polls and helped with the process, and many congratulations to all our winners. For more information on the award methodology, contact Katie Llanos-Small, fixed income editor: kllanos-small@euroweek.com.

Spanish FIG bonds hit after Moody’s downgrades Spanish bank debt underperformed on Friday after Moody’s cut the long term ratings of 16 of the country’s lenders, as well as Santander UK.

The EuroWeek 25 Most Influential Bond Market Participants To mark EuroWeek’s 25th anniversary at this year’s Bond Dinner, special awards were given out to the 25 most influential people working in the capital markets today.

EM issuers keep fingers crossed for stability Tinkoff Credit Systems, a Russian consumer lender, will not price its new bond issue until next week at the earliest, said a syndicate official close to the deal this morning.

Goldman Sachs rumoured to be reworking sukuk plans It is now several months since Goldman Sachs put its hotly debated plans for a $2bn sukuk programme on the backburner, but that does not mean the Islamic market has allowed the US bank's potential landmark issue to stray far from its thoughts. Neither, apparently, has Goldman.

Worries rise on Greece, Spain as syndicates prepare for shutdown With most of Europe on holiday, syndicate bankers in London painted a grim picture of the prospects for new senior bank issuance on Thursday, as worries continued about banks in Greece and Spain.

Bank of Georgia braves volatility to roadshow bond Bank of Georgia has mandated Bank of America Merrill Lynch, Credit Suisse and JP Morgan to arrange a series of fixed income investor meetings.

Dubai Islamic Bank roadshows sukuk in sheltered market Dubai Islamic Bank has released roadshow dates for its sukuk, undeterred by worsening market conditions in the conventional bond space. The meetings start in Kuala Lumpur tomorrow, moving to Singapore on Friday, Abu Dhabi on Sunday and finish in London on Monday. A dollar Reg S sukuk benchmark could follow.

Senior market looks forward to supply after covered bond reopening FIG syndicators on Wednesday were looking forward to seeing more supply in senior unsecured after OP Mortgage Bank came to the covered bond market with a well-received €1.25bn deal — although they admitted new issues in senior would probably not come this week.

Tight pricing for BSF debut sukuk, size upped to $750m Banque Saudi Fransi (BSF) issued its debut benchmark sukuk at the tight end of guidance on Tuesday at 185bp over mid-swaps, after increasing the size of the transaction from $500m to $750m. Despite aggressive pricing and a volatile global market backdrop, the deal met strong demand, with a book of over $4bn from some 160 orders.

Cyprus Popular offers cash or senior in tier two swap Cyprus Popular Bank is offering holders of a €450m subordinated floater to switch the bonds in to senior paper or tender them for cash below par, in a bid to increase its capital ratios.

Italian bank CDS tighter despite Moody’s action Italian banks’ CDS levels tightened in with the rest of the market on Tuesday, despite Moody’s downgrading the long and short term ratings of 26 Italian banks by up to four notches.

Saudi Fransi debut sukuk expected to price at tight end Banque Saudi Fransi (BSF) is hoping to price its debut sukuk today at the tight end of 185bp-190bp over mid-swaps price guidance, according to a syndicate official close to the deal. Guidance was tightened this morning from talk of 200bp over mid-swaps that was released yesterday.

Tesco Bank flexes retail muscles with jumbo-sized bond Tesco Bank has closed books on its third retail bond, a £200m eight year deal with a 5% coupon. Books were supposed to close on Wednesday but bookrunners Barclays and Investec were forced to shut them early because of the strength of demand.

Tinkoff Credit Systems plans $200m-$300m three year bond Tinkoff Credit Systems (TCS) is hoping to sell a $200m-$300m three year Eurobond, according to a source in the firm's treasury. Citi, JP Morgan and Alfa Bank are arranging the note. The roadshow for the deal is planned to end in the middle of this week.

Delta Lloyd eyes sub deal Delta Lloyd Life has mandated Barclays, Morgan Stanley and Rabobank for a series of investors meetings, with an eye to a debut subordinated transaction.

Issuance down $100bn on last year as bankers fear early close of market Senior unsecured bankers on Monday expressed concern that their market might not see supply until after the summer holidays.

TCS roadshows Eurobond Tinkoff Credit Systems on a roadshow for a Eurobond that will end around the middle of this week. Citi, JP Morgan and Alfa Bank are arranging the note.

VietinBank raises $250m from debut deal after delay Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) finally pushed through with its $250m debut in the international bond market late last week.

Covered bond market shaken by 3CIF’s mystery suspension This week’s shocking suspension of Caisse Centrale du Crédit Immobilier de France’s covered bonds from Euronext and the Luxembourg stock exchange has left capital market participants bewildered and angry.

What’s the cap gap? Demand for Spain clarity after Bankia turmoil Spain is at risk of an Irish-style bank meltdown, investors and bankers cautioned this week as the government was forced to take a 45% stake in its largest savings bank group.

3CIF: uncomfortable senior levels may offer a clue 3CIF’s last senior trade, priced on February 1, was welcomed with praise from the market at the time. But on Thursday a syndicator involved in the deal told EuroWeek that the borrower had indicated at the time of issuance it was under pressure from rising costs in the asset class.

CRH holds off as CIF stays silent but buyers’ hunger grows Core and non-Eurozone covered bond supply remains in high demand, with France’s Caisse de Refinancement de l’Habitat the most likely candidate to slake investors thirst for issuance.

DVB defies volatility to price first senior benchmark With FIG markets fraught with execution risk given the suspension by French regulators of trading in 3CIF’s covered and senior bonds and a police search of the headquarters of Banca Monte dei Paschi di Siena, this week was an unlikely candidate to see the first senior deal of the month.

UBS prices €750m FRN, taps demand for core names UBS braved volatile credit markets on Thursday with a €750m two year floating rate benchmark that was priced at 60bp over three month Euribor. Bankers said the deal benefited from a flight to high quality core names and a lack of primary supply — although some said that market conditions affected the size.

AIG pulls in 40% in rare tender as it looks to delever American International Group priced the tender offer for its entire Swiss franc curve on Wednesday. Investors agreed to buy back Sfr338.46m, equating to 40% of the insurance company’s outstanding notes in the currency, which were priced in 2006 and 2007 and totalled Sfr850m.

Swiss Re, Macquarie meet investors, deals may follow Macquarie and Swiss Re are both set to finish European investor meetings on Friday. The Swiss insurer is eyeing its third capital trade of the year, but EuroWeek understands that there is no specific transaction under discussion for Macquarie, whose meetings were organised by HSBC and Royal Bank of Scotland.

Alpha buyback adds €333m to CT1 ahead of Basel III Even as its sovereign looked to be lurching ever closer to meltdown, Greek lender Alpha Bank added €333m, or 74bp, to its core tier one capital ratio by buying back capital securities below par, it said this week.

Gazprombank doubles up on bond success Gazprombank priced its senior $500m 5.625% 2019s at par on Thursday, winning praise from bankers away from the note for having followed its tight subordinated deal of a fortnight ago with successful senior trade.

Investors warn of hazards as Dubai Islamic Bank preps sukuk With Dubai Islamic Bank gearing up to launch a benchmark sukuk before the end of May, investors have warned of what could be significant hazards facing the borrower, foremost among them questions around the bank’s assets.

DBS China sells debut panda bond, leaves room for more DBS Bank’s Chinese branch made its debut in the country’s domestic bond market at the start of the week, raising Rmb500m ($79.3m) — and opening the door for more issues that will bring the bank’s fundraising in the panda market to a total of Rmb2bn.

Asia banks eye bonds to fund loan grab, corp expansion Asian banks will increasingly look to tap the international bond market over the next few months, ramping up their dollar liquidity so they can grab business from European banks that are scaling back from the region’s loan market — as well as to meet rising demand from Asian companies that are looking to expand overseas.

BEA returns to dim sum, adds offshore to mainland borrowing Bank of East Asia’s China branch raised Rmb1bn ($159m) from its second visit to the dim sum bond market late last week, offering a juicy yield pick-up against outstanding notes from other lenders.

RHB pays debt premium as Europe elections spark fear Malaysian lender RHB Bank paid a premium over rival banks for its return to the international bond market this week, as investors sought higher yields amid rising concerns about European debt following elections in France and Greece.