Investor-Issuer Profiles

Eu3tr weight of capital lifted as banks leave shadowlands behind Capital markets this week shrugged off the dark clouds that have hung over the banking sector since December 2009 following the announcement that their new Basel III capital requirements would be far lighter than feared and far slower in arriving.

FIG bond market back on form with summer bouquet of fresh deals European FIG bonds markets rallied strongly this week, lapping up a full gamut of new issues, from Spanish banks to 50 year deals to a retail tier one.

Westpac New Zealand turns to Swiss francs Westpac New Zealand took advantage of the Swiss market’s positive mood about financial institutions to issue a Sfr300m five year deal this week.

Credit Suisse attracts $8bn of orders for hybrid Credit Suisse raised a whopping $8bn of orders for its retail hybrid tier one bond, the latest in a short but impressive line of such bank deals that have tapped into a rich vein of investor demand.

SGS wakes Swiss mart from summer siesta Unrated testing and inspection company SGS debuted in the capital markets on Tuesday, with a Sfr550m six year bond. The size of the deal underlines the pace of summer activity in the market, but also the attractions of buying a strong corporate issuer.

Stress tests increase transparency, lift market Results of European stress tests published on July 23 increased transparency on banks’ sovereign debt holdings and lifted nervous FIG markets across the continent.

Westpac leads big week for US high grade, Alcoa shines Westpac claimed the prize for the biggest trade in a bumper week for US high grade that saw more than $11bn of issuance by close of business on Thursday.

UBS marks return to form with $2.5bn 10yr benchmark offer UBS, rated Aa3/A+/A+, used the momentum of strong second quarter earnings and an improvement in sentiment towards foreign banks to tap the US credit market with a $2.5bn 10 year trade.

Egypt’s National Bank returns to bond market Debt investors grabbed their second chance for exposure to Egypt this year when the Arab country’s largest bank followed the sovereign’s April blowout with a $600m five year note via Citi, Deutsche Bank and Morgan Stanley on Thursday. National Bank of Egypt priced its offering at 5.25%, in line with guidance, equating to 357bp over US Treasuries.

Markit Data 1165

IDBI sells $350m bond in late European session Industrial Development Bank of India (IDBI) Bank raised $350m in the international bond market as EuroWeek went to press, getting $1.7bn of orders for a deal that took hours more than usual to price after lengthy conference calls between funding officials and bankers.

NAB returns to Samurai bonds, raises ¥100bn National Australia Bank raised ¥100bn ($1.41bn) in the Samurai bond market at the end of last week, getting a big response from Japanese investors after a series of meetings across Asia. The deal underscored the depth of demand in the Samurai market for higher-rated issuers.

BBVA and Santander launch Spanish comeback Banco Santander and BBVA have returned to the bond market as soon as possible after conditions generally, and their curves in particular, improved sharply early this week.

BofA leads US banks back into euros Bank of America has raised Eu5bn of demand for a seven year bond to be priced at 212.5bp over mid-swaps, potentially re-opening euro denominated issuance for US banks.

Credit Suisse gets $8bn seal of approval for hybrid Credit Suisse raised a whopping $8bn of orders for its retail hybrid tier one bond, the latest in a short but impressive line of such bank deals that have tapped into a rich vein of investor demand.

Gazprombank to follow Sberbank with dollar benchmark Gazprombank is selling a dollar fixed rate benchmark deal via Barclays Capital, Royal Bank of Scotland and UBS. The Reg S only note will have a December 2014 maturity.

Insurers flock to Rabo’s 15 year tap Rabobank Nederland tapped its 2025 euro issue on Wednesday in an opportunistic move that took advantage of strongly positive market tone.

National Bank of Egypt dollar deal talked at 5.25% yield area National Bank of Egypt has released price talk on its five year dollar bond of 5.25% yield area. The deal will have a maximum size of $600m and is likely to be priced on Thursday, said a banker.

Azerbaijan’s IBA leads the way for peripheral EM loan borrowers International Bank of Azerbaijan has signed a $100m three year syndicated loan, becoming only the second financial institution from the CIS, outside Russia, to obtain a deal this year.

BBVA leads Spanish banks back into senior market after three month supension Spain’s BBVA has leapt straight into the bond market after releasing its second quarter results, taking advantage of strong market conditions following positive news on Basel III regulations and stress tests.

Credit Suisse takes aim at retail with dollar tier one Credit Suisse is marketing a benchmark sized tier one deal in dollars to international investors.

Rabo back for more after UK investors lap up 50 year Rabobank will tap its 15 year euro denominated issue on Wednesday, just a day after drumming up £360m in demand for its ultra-long 50 year deal.

Sberbank taps 2015s for ‘logical’ $500m Russian Sberbank sold a $500m tap of its 5.499% 2015s on Tuesday, bringing the total size of the note to $1.5bn.

Westpac New Zealand turns to Swiss francs Westpac New Zealand took advantage of the Swiss market’s positive mood about financial institutions to issue a Sfr300m five year deal.

IIB out of default but attention turns to 2013 bond Russian International Industrial Bank has completed the restructuring of its Eu200m 9% 2010 bond, having paid an overdue coupon of Eu18m and a 5% consent fee to bondholders that had agreed to an early bird offer.

Isbank follows Akbank and Vakif with two year loan Isbank has become the third Turkish lender in to launch a two year syndicated loan in the last six weeks, having invited banks into a facility that will replace a $740m equivalent line due in mid-September.

Peripheral struggle worsens in ECP The results of the European bank stress tests mean that the European commercial paper market is likely to become even more difficult for smaller peripheral banks to access than it has been.

Rabo goes ultra-long with £300m 50 year Rabobank Nederland will sell a £300m 50 year deal on Tuesday afternoon at 100bp over Gilts, in a deal that has stunned fund managers.

Sberbank 2015s tap expected Russian Sberbank plans to price a tap of its $1bn 2015s on Tuesday afternoon. DZ Bank, JPMorgan and Royal Bank of Scotland, which were bookrunners on the original note placed at the end of last month, are arranging the tap.

SG promotes Shanahan, Cherpion in syndicate rejig Société Générale has reshuffled reporting lines within its global syndicate team, with Terence Shanahan and Eric Cherpion moving up under Alvaro Huete, who became the sole global head of syndication in May.

Sweet relief for banks as Basel takes the pressure off — liquidity, leverage rules put off until 2018 Banks received a greater than expected respite from impending regulation on Monday evening when the Basel Committee on Banking Supervision revealed the status of negotiations on Basel III.

NAB raises ¥100bn in Samurai bond market National Australia Bank raised ¥100bn ($1.41bn) in the Samurai bond market on Friday, getting a big response from Japanese investors after a series of meetings across Asia.

ABS market responds to stress tests with a shrug Securitisation market participants declared Europe’s bank stress tests a “non-event” for ABS, with little impact on secondary markets and primary markets almost closed for the summer.

CDS shows Greek banks among stress test winners Two Greek banks were among the names whose CDS levels tightened the most after the Committee of European Banking Supervisors revealed its bank stress test results on Friday night. EFG Eurobank Ergasias’s CDS levels tightened by 13% after the results were published while National Bank of Greece levels dropped 11%, according to data provider Markit.

Failed EU banks review their options Spain’s Banca Cívica, one of seven EU banks to fail the Committee of European Banking Supervisors’ stress tests on Friday, will place a Eu450m convertible bond with JC Flowers, a US private equity firm.

FIG bond issuance likely as stress tests bring transparency Banks ranging from triple-As to those from peripheral jurisdictions are eyeing markets for senior funds this week, after Friday’s stress test results increased transparency in the European banking system.

Greek bank raises LT2 at home National Bank of Greece spent last week boosting its capital base through a private placement.

SBI nets $1bn from 144a debut State Bank of India raised $1bn at the end of last week, selling its first issue to onshore US investors after building a $4.5bn order book.

Stress test methodology hammered as unrealistic FIG market participants criticised the methodology behind Friday’s stress tests, saying it lacked credibility and underplayed key factors such as a double dip recession .

Switzerland’s ‘severe’ bank test details kept secret Swiss financial regulator FINMA announced that its biggest two banks Credit Suisse and UBS had a tier one capital ratio of at least 8% in an adverse scenario harsher than that used by the Committee of European Banking Supervisors.

Eu100bn Armageddon or Eu30bn joke? Banks face moment of truth A potential Eu100bn black hole in European banks’ capital bases is the single focus of markets ahead of the publication of bank stress test results this evening (Friday).

BBVA pays record but reopens Spanish FIG Banco Bilbao Vizcaya Argentaria priced the first benchmark bond for a Spanish bank in three months on Monday, selling a Eu2bn three year covered bond on the back of improved sentiment for Spanish debt and a record re-offer spread.

Bank of Ireland flirts with EM pricing Bank of Ireland issued its debut Swiss franc deal on Wednesday, a Sfr325m 2.5 year government guaranteed bond, coming two days after Moody’s downgraded Ireland’s debt.

Spanish NPLs rocketing, may peak at 6.5% in second half Non-performing loans across Spain’s financial system are soaring, according to second quarter results from Banco Sabadell and BankInter. NPL numbers at both institutions increased by almost 40% over the last year, while those at La Caixa also rose.

Wall Street raids bond market after Q2 results The US FIG market continued its resurgence this week with investors snapping up $3bn issues from Goldman Sachs and Morgan Stanley on consecutive days. Meanwhile, the corporate sector saw its busiest week for new debt in nearly four months.

YKB follows Akbank’s lead, may price next week Turkish Yapi ve Kredi Bankasi (YKB) on Thursday finished its investor meetings in Europe and the US, following soon after Akbank’s $1bn five year bond priced last week, which was the first direct bond issue from a Turkish private sector borrower.

VTB mandates for Sing dollar Eurobond after Swiss success Russian VTB has mandated VTB Capital and OCBC Bank managers as bookrunners of a Singapore dollar denominated Eurobond. The deal would be the first in this currency from a Russian issuer. The size and maturity of the note have not been set.

Stress tests no stress for sovereigns and agencies One sector that is not worrying about the stress tests is the SSA market. Even if the tests throw up some nasty surprises and a larger than expected number of banks require capital injections, sovereigns or government agencies are unlikely to see their borrowing requirements increase as a result.

Tier two bank debt attracts LatAm enthusiasm BanColombia and Brazil’s Banco Votorantim attracted over $5bn of demand for their subordinated tier two bank debt early this week. This underscored strong investor demand for Latin American financial paper, even in a subdued trading week dominated by fears over European banks’ stress tests results, bankers said.

Markit Data 1164

Seven banks fail but regulators caution against complacency European regulators have warned banks against complacency after just seven of 91 institutions failed the much-awaited stress tests on Friday.

NACF raises $500m after big demand Korea’s Nonghyup Bank, also known as National Agricultural Cooperative Federation, raised $500m in the international bond market this week, pricing a deal between outstanding bonds from Woori Bank and Industrial Bank of Korea.

NAB plans Samurai bond worth ¥80bn National Australia Bank is planning to raise as much as ¥80bn ($925.3bn) today (Friday) from its second Samurai bond issue this year.

BEA taps 2020 LT2 deal after secondary rally Bank of East Asia increased its recent July 2020 lower tier two bond by $150m at the end of last week, getting a cheaper price for the tap after the original $450m deal rallied strongly last week.