Performance encourages longer dated shift

SSA bankers, though cheered by this week’s deals, now fear that issuers, seeing their deals tighten by 5bp and upwards in aftermarket trading, will start to demand more aggressive levels, which could send the market into a downward spiral. So far this week, a continued increase in investor risk appetite is reflected in more long dated supply with five years the favourite spot in dollars and 10 years in euros. Transactions have been well oversubscribed and priced at the tight end of the range if not inside, and, most encouraging of all, the new issues have performed well in the secondary market. EDC’s $1bn five year dollar issue, for example was priced at mid-swaps plus 75bp versus guidance of high 70s over while NRW.Bank issued its Eu1bn 10 year at plus 80bp against guidance of 85bp area. A sign of better times to come, or a case of too much, too soon? Read EuroWeek on Friday.