End of an era
The era of easy leg-ups in the league table for underwriters and cheap financing for the Landesbanken is over. From July 18 the German states' guarantees for their banks were abolished, meaning future financing for Landesbanken will not carry the triple and double A ratings of their owners. It seems clear that the Landesbanken will now turn to covered bonds for much of their senior funding. However, not so apparent is what the underwriters that had depended on Landesbank underwriting to boost their league table position will now do.
Citi makes sovereign breakthrough
Still on the theme of cheap money and the end of an era, Citigroup has at last managed to get a bond mandate from a core European sovereign, only a year after the notorious MTS bond trade. But the Spanish mandate was won on a bid-price basis – alongside Barclays and DrKW. So the $1 billion five-year issue was therefore extremely cheap financing for the sovereign, appearing at an eye-popping "spread" only 17 basis points back of treasuries or Libor less 26bp – virtually on top of Germany's five-year dollar deal.
BarCap boosts US syndicate
Barclays Capital has hired Mark Bamford from Goldman Sachs to head its US debt syndicate operations.