World Bank leads tightening trend

As spreads continue to contract in SSA territory, issuers are achieving levels thought to be unachievable a week ago. The World Bank’s debut 10 year euro transaction is the prime case in point. Last week, bankers said that mid-swaps plus 50bp might be too aggressive — but the Eu3bn deal was priced at 43bp and has gone on to trade 2bp tighter in the aftermarket. Deals from Instituto de Credito Oficial, Société de Financement de l’Economie Française and KfW achieved similarly spectacular results but more pessimistic market participants are already wondering when the bubble will burst. Read EuroWeek on Friday for coverage of the week’s transactions