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Industry roundup: 26 May

BNP Paribas report highlights value of capital markets to UK economy 

The Value of Capital Markets to the UK Economy report - commissioned by BNP Paribas in collaboration with New Financial - analyses how UK companies use the capital markets, and the role they play in supporting jobs across the country.

The report finds that capital markets channel investment in the UK economy to help finance companies and ultimately drive growth, investment, jobs and prosperity. This report measures the direct economic contribution that the capital markets make to the ‘real economy’ in terms of employment and investment for companies of all sizes. The capital markets remained a critical source of financing during the COVID-19 pandemic, and UK corporates have raised £30bn in the bond and equity markets since mid-March 2020. Key findings from the report include:

Capital markets are hugely relevant to UK plc and UK Ltd

An estimated 90% of UK companies with revenues of more than £200m use the capital markets to help raise capital, invest in or restructure their business and manage risk.

Companies that use the capital markets play a vital role in the UK economy

They employ an estimated 5.5 million people across the UK - roughly a fifth of the private sector workforce.

During the COVID-19 crisis, capital markets have played an important role in supporting the UK economy

In the midst of the COVID-19 pandemic, 150 UK companies raised a total of circa £30bn in the corporate bond and equity markets between mid-March and end-April 2020.

Capital markets are not just for large companies

An estimated a 14,000 UK companies with revenues of less than £200m used the capital markets between 2014 and 2018.

Capital markets add vital capacity to corporate funding

UK companies raised nearly £750bn in the bond, equity and leveraged loan markets between 2014 and 2018, representing a big boost to annual flows of gross bank lending of around £300bn a year in the UK.

Large UK companies have combined defined benefit pensions assets of around £750bn

This aggregates the pension savings of millions of people into a valuable pool of capital that can be put to work in the economy.


Bank of America issues US$1bn corporate social bond

Bank of America has announced the issuance of a US$1bn corporate social bond to support the fight against the COVID-19 pandemic. The four-year bond, which is callable in three years, will pay interest semi-annually at a fixed rate of 1.486% for the first three years, and will pay interest quarterly at a floating rate thereafter. The bank says this offering is the seventh environmental, social and governance (ESG)-themed bond it has issued since 2013. Previous offerings - including five 'green' bonds and one 'social' bond - have focused on providing clean energy and supporting affordable housing and community development financial institutions (CDFIs), respectively.

The proceeds from this offering will be allocated to health care industry lending in the firm’s Global Commercial Bank, specifically not-for-profit hospitals, skilled nursing facilities, and manufacturers of health care equipment and supplies. This bond offering is designed to support the U.N.’s SDG 3 focused on Good Health and Well-Being.

“The world is in a fight against COVID-19 and we are committed to doing our part by supporting the companies and professionals who are on the front lines,” said Bank of America vice chairman Anne Finucane. “The proceeds from this offering will help deliver critical resources for the companies involved in the testing, diagnosis, treatment and prevention of this insidious virus, while providing investors an opportunity to join us in this all-important effort.”


Sberbank launches cross-border supply chain app

Sberbank has launched a mobile app called Bank of Business Partners on Android. The app, also available on iOS, builds on the bank's website Bank of Partners, and lets users look for business partners, place products and services, and interact with potential customers using their phones.

The app lets users study the market and competitors, and look for business partners meeting their criteria. Users can also add services and products, with the ability to create offerings in two steps, add documents and links, and leave feedback. The app also has an online chat facility for potential business partners to talk.

The app also offers foreign economic activity services. Users can check the reliability of counterparties from different countries, obtain international trade analytics for product categories, and search for auctions in the international catalogue. The multilanguage interface and auto-translation is designed to help corporates look for partners and competitors across the globe with no language barriers, as the system automatically translates any content into Russian, English, or Chinese.

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