Americas

Royal Bank of Canada issued the first dollar denominated Canadian deal in three months at the widest spread this year, while Münchener Hypothekenbank supplied the only euro deal of the week.

Mixed fundamentals among US oil producers have caused the futures curve for WTI Crude to flatten, as spot prices rise.

Goldman Sachs and Sumitomo Mitsui Trust Bank are set to start marketing SumitG, a bond backed by a portfolio of RMBS, but secured by claims against both institutions. Goldman will be hoping to avoid the fate of last year's Figsco issue, a note with a similar structure which never made it to market. Bill Thornhill reports.

Royal Bank of Canada — RBC

Inter-American Development Bank

Brokers and traders scoured for signs of market appetite this week for new short term VIX options which began trading on Thursday.

SSA borrowers shrugged off a hiccup by the Province of Ontario this week to issue a series of strongly supported benchmark euro deals.

Futures markets are discounting the likelihood of a rate hike by the US Federal Reserve despite Chair Janet Yellen’s guidance, with traders playing wait-and-see along the yield curve.

SumitG, a triple recourse programme sponsored and guaranteed by Goldman Sachs Group and Sumitomo Mitsui Trust Bank, will be backed at first entirely by senior tranches of European and Japanese RMBS. Over half of the collateral will be rated triple A, and none of the bonds are below A minus. Despite this the deal gets no rating benefit from the collateral pool.

Two Brazilian lenders have concluded buybacks of subordinated notes, with Banco Votorantim easily passing its target and Banco BMG getting close.

In the lead up to the commencement of trading for short-term VIX options on Thursday, brokers and traders are scouring for signs of market appetite for the new contracts.

Royal Bank of Canada priced one of the largest dollar covered bonds on Wednesday and despite pricing at the widest spread this year, the deal achieved better execution than was available in senior unsecured or euro covered bonds. It also showed the limitations of an illiquid secondary market for price discovery purposes, but with the real clearing level now set, others should follow.