European Banks Tap The Bond Markets As Sentiment Improves

9th Jul 2010 12:14

By Mark Brown Of DOW JONES NEWSWIRES LONDON (Dow Jones)--European banks are taking advantage of better sentiment in bond markets to raise money after sovereign bond market volatility limited issuance in May and June. HSBC Holdings PLC (HBC) of the U.K. and France's Banque Federative du Credit Mutuel (FD-BFD) are offering 10-year, senior, benchmark bonds Friday, after Thursday saw five new senior deals, two lower tier 2 issues and one covered bond. Investors are ready to buy bank bonds again as peripheral euro-zone sovereign spreads tighten and the economic outlook appears to improve. "Banks are just issuing because the market is open at the moment," said a debt syndicate banker. "Bunds were lower Thursday, bank spreads were tighter and there was a very positive tone" Thursday's new issues totalled EUR5.6 billion and took supply for the week to EUR11.5 billion, according to Deutsche Bank AG, "although the market is still predominantly focused on higher quality names so far," Deutsche credit strategist Jim Reid said in a note. "We will probably see a flurry of fresh supply over the next days as issuers try to lock in some of their funding before the European summer recess," Reid said. "Days like yesterday are a tiny but important step towards normality." -By Mark Brown, Dow Jones Newswires; + 44 (0)207 842 9485; [email protected] (END) Dow Jones Newswires July 09, 2010 07:14 ET (11:14 GMT)