Europe

Recently, BBVA announced that it had approached the management of Banco Sabadell, to explore a possible merger between both entities, with BBVA also appointing advisers for this purpose.

Following yesterday’s release of Italian energy company Enel's 2023 annual sustainability report, it was confirmed that they had failed to meet the emissions reduction key performance indicator (KPI) linked to a number of their sustainability linked bonds (SLBs).

The Additional Tier 1's product was first launched in early 2013, so the asset class has mostly seen the period of negative interest rates and challenging operating environment post the Euro zone crisis.

In this Back to Basics webinar, Aza Teeuwen (Partner, Co-Head of ABS) and Elena Rinaldi (Portfolio Management), provided a comprehensive understanding of the key aspects and trends within the European CLO market.

We have had a busy week on the central bank front with the Federal Reserve chair Jerome Powell’s semi-annual testimony to congress on Wednesday before Christine Lagarde took centre stage at the European Central Bank press conference yesterday. 

NN Group, the Dutch insurer, has issued its inaugural €750m Restricted Tier 1 (RT1) deal, which came with a 6.375% coupon and BBB-/BBB rating from S&P/Fitch.

Almost a year ago to the day, we were in the midst of banking sector turmoil, which started off with regional banks in the US and spilled over to Europe, eventually culminating in the forced merger between Swiss banks UBS and Credit Suisse.  

Last year was a volatile year for global markets but also one where economies performed better than expected. If we look at the leveraged loan market, last year was characterised by a surge in so-called amend and extend (A&E).

In this Back to Basics webinar, Aza Teeuwen (Partner, Co-Head of ABS) and Douglas Charleston, (Partner, Co-Head of ABS) provided a comprehensive understanding of the key aspects and trends within the European RMBS market.

A few weeks ago, JP Morgan skipped a call on one of its $1,000 par preference shares (“US Prefs”). The perpetual notes had a coupon of 6.75% payable until Jan’24, with a subsequent reset of 3-month SOFR + 404bps. Post the non-call, the coupon changed to 9.35% and will continue to reset every 3 months.

Within the European ABS landscape, Volkswagen Leasing has solidified its role as a benchmark issuer under the Volkswagen Compartment Leasing (VCL) platform. Volkswagen uses this platform – with over 25 years of history – to finance standard German auto loans. It is probably one of the least exciting platforms but also one of the most liquid ABS investments you can buy.

We recently highlighted in our 2024 outlook our expectations of significant inflows into fixed income to be an important technical driver of performance in the year ahead.