World Bank shores up confidence

The World Bank will price a $1bn minimum five year global this afternoon in a move designed to help restore confidence by showing the new issue market is open for business. The guidance is mid-swaps less 35bp area, the tightest level achieved by a SSA borrower in five years, not surprising since this is World Bank’s first dollar global since March 2006. Mid-morning, lead managers Goldman Sachs, JP Morgan and Morgan Stanley, said the book was over two-thirds subscribed after 1.5 hours, with central bank participation high. A similar response can be expected for Kingdom of Denmark, which will issue a benchmark transaction next week. Barclays Capital, JP Morgan and Morgan Stanley have the prestigious mandate for what the market expects to be a dollar bond, most likely three years where the basis swap into euros is a whacking 45bp today. EIB is also being talked for next week, again in three year dollars. Read Friday’s EuroWeek for coverage of World Bank and the general state of the SSA market.