Embed Size (px)
Citation preview
London Stock Exchange
Corporate Bond Purchase Scheme (CBPS)
Bank of England
January 2017
Bank of England Bond Buying Programme
With the majority of BoE eligible bonds listed in London, we are the #1 listing venue for issuers wishing to take advantage of the scheme
Breakdown of Eligible Corporate Bonds
The Bank of England on 4 August 2016 announced a
£10bn Corporate Bond Purchase Scheme (CBPS) as a part
of its Asset Purchase Facility. The scheme will begin in
mid-September and focus on the sterling corporate bond
market, lasting for 18 months at present.1,2
Eligibility Criteria
Bonds issued by companies (including their finance
subsidiaries) that “make a material contribution to
economic activity in the UK”
Conventional senior secured or unsecured debt
“Spens clause” normally eligible
Rated investment grade by at least one major rating
agency and subject to the BoE assessment process
Cleared and settled through Euroclear and/or Clearstream
Minimum amount £100m in issue
Minimum residual maturity of 12 months
Minimum 1 month since issuance
Admitted to official listing on an EU
stock exchange
No complex structures
No perpetual instruments
No banks or financial
institutions
1Market Notice 4th August: http://www.bankofengland.co.uk/markets/Documents/marketnotice160804apfcbps.pdf 2Market Notice 12th September: http://www.bankofengland.co.uk/markets/Documents/marketnotice160912apfcbps.pdf
Breakdown of Eligible Instruments
72% UK
19% Europe
9% US
242
55
17 12 7 1 0
20406080
100120140160180200220240
LSE Lux ISE Euronext NYSE SGX
Nu
mb
er
of
Lis
tin
gs
Primary Listing Venue Breakdown
Majority of BoE eligible
corporate bonds listed
in London, with 28
listed on ORB
2
0
0.3
0.6
0.9
1.2
1.5
1.8
Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16
Gil
t Y
ield
(%
)
5yr Gilt
10yr Gilt
BoE Impact on Sterling Issuance
Benign market conditions for Sterling issuance driven by the BoE Corporate Bond Purchase Scheme announced post-referendum
Movement in UK Government Bond Yields
Sterling Issuance Case Studies
Sterling Benchmark Corporate Bonds Issuance Volumes Since Jan-15
Largest sterling
transaction since
Verizon £850m deal in
Feb 2014
8th August 2016
£800m 33 year
3.375% Fixed Notes
Main Market
8th August 2016
£650m 7 year
1.177% Fixed Notes
12th August 2016
Main Market
First sterling
transaction from
issuer since 2011
£1bn 40 year
3.000% Fixed Notes
12th August 2016
Main Market
Achieved a lower
coupon for a longer
tenor than GBP 8th
Aug transaction
£400m 10 year
2.875% Fixed Notes
10th August 2016
Main Market
Upsized from £230-
240m. 30% of
orderbook comprised
of international
accounts
£350m 10 year
2.125% Fixed Notes
16th August 2016
Main Market
Upsized from £300m
on the back of an
orderbook 2.6x
oversubscribed
£650m 36 year
2.250% Fixed Notes
9th September 2016
Main Market
£1.5bn orderbook
generated for a long
duration transaction
offering minimal new
issue premium
£650m 1.125% 5yr £850m 2.125% 12yr £700m 2.625% 22yr £800m 2.750% 30yr €750m 0.625% 8yr
15th September 2016
Main Market
Largest corporate IG
GBP offering ever,
with 12yr tranche
largest single tranche
ever
Impact of Brexit vote
Impact of
BoE announcement
Source: Bloomberg, as at 30 December 2016
0123456789
10
Jan
-15
Fe
b-1
5
Ma
r-15
Ap
r-15
Ma
y-1
5
Jun
-15
Jul-1
5
Au
g-1
5
Se
p-1
5
Oct-
15
Nov-1
5
Dec-1
5
Jan
-16
Fe
b-1
6
Ma
r-16
Ap
r-16
Ma
y-1
6
Jun
-16
Jul-1
6
Au
g-1
6
Se
p-1
6
Oct-
16
Nov-1
6
Dec-1
6
GB
P Issu
an
ce V
olu
me
(£b
n)
Highest volume of GBP
corporate issuance post-BoE
announcement since June 2009
3
Contact Details
4
London Stock Exchange’s Fixed Income Team
Primary Markets
Global Head of Fixed Income Pietro Poletto +39 02 7242 6243 [email protected]
UK Head of Fixed Income Darko Hajdukovic +44 20 7797 3306 [email protected]
Fixed Income Product Specialist Elena Chimonides +44 20 7797 1509 [email protected]
Secondary Markets
Global Co-Heads of Equity, Funds, Fixed Income Pietro Poletto
Brian Schwieger
+39 02 7242 6243
+44 20 7797 3860
For further information refer to www.lseg.com 5
