Europeans eye Yankees for issuance

摘要

European banks are expected to flock to the Yankee bond market with Additional Tier 1 and Tier 2 issuance in the autumn, now that the cost savings of issuing in dollars have far outstripped those in euros. A sharp rally in dollar-denominated European Tier 2 securities last week made it possible for certain European banks to reap at least 50bp of savings if they go to the US market rather than euros, including the cost of swapping back to their home currency. Bankers differ on how much savings are to be had by issuing AT1s in dollars. But most agree that the Yankee market will be the place for Europe's financials if they want a combination of large deal size, strong demand and better pricing for capital. "The dollar market is more competitive right now and the basis swap has moved in favour of European borrowers issuing in dollars and swapping back to euros, so we could see financials look to take advantage of this," said Alexandra MacMahon, head of FIG DCM for EMEA at Citigroup.