RETAIL CURRENCIES
The European Bank for Reconstruction & Development (EBRD) revisited the Hungarian forint bond market this week for the first time since 2001, launching a Huf10bn zero coupon February 2009 issue led by TD Securities.
Two large institutional lead orders created the opportunity. The transaction is encouraging for the sector as it is only the second zero coupon public bond to be issued in forints — the first was a Huf8bn March 2009 deal for NordLB launched by Deutsche Bank in February 2002.
“Despite increased currency risk and interest rate volatility, we have seen fresh demand in the market from investors who like the returns available for taking on that currency risk,” said a TD syndicate official in London.
KfW also tapped the forint market, with a Huf14bn 9% February 2006 deal launched by Deutsche Bank late yesterday afternoon (Thursday). Other borrowers increased their forint bonds.
The Republic of Austria, Land Nordrhein-Westfalen, Land-wirtschaftliche Rentenbank and Rabobank Nederland all took advantage of the renewed demand.
Elsewhere in the central and eastern European currency markets, Aareal Bank launched a Ck1bn, January 2010 deal with a coupon of 17bp over Pribor through Deutsche Bank.
It came at a margin of 22bp over three month Pribor and was based on institutional demand.
In the zloty market, the European Investment Bank (EIB) launched a Z300m 6.25% February 2009 deal led by Deutsche Bank as bookrunner and joint lead Credit Suisse First Boston.
In non-core dollars, the Australian dollar sector was quiet, with only Rabo Australia, guaranteed by Rabobank Nederland, launching a new issue.
Bookrunner TD Securities and joint lead Rabobank managed the A$200m 6% February 2009 deal. Retail and institutional investors took the bonds.
BMW Australia Finance, guaranteed by BMW, increased its A$150m 5.5% October 2006 issue by A$100m.
The Canadian dollar market had a busy week, with three new issues and one increase. All borrowers launched floating rate notes, the basis swap out of the currency having moved in international issuers’ favour.
On Monday, Abbey National Treasury Services tapped last week’s C$150m January 2006 issue by C$75m via TD Securities. The deal pays a coupon of 13bp over three month bankers’ acceptances (BAs).
Westpac Banking Corp launched a C$200m (raised from C$175m) January 2006 issue with a coupon of 11bp over three month BAs the next day through RBC.
Two issues were launched on Wednesday: Bayerische Landesbank offered a C$300m February 2009 deal, led by TD Securities, with a coupon of 17bp over three month BAs; and RBC launched a C$125m February 2006 transaction paying 14bp over BAs for Britannia Building Society, the UK issuer’s first in the sector and well received.
It was a quiet week in the Nordic market with just two new issues in launched in Swedish kronor. With a repo rate of 2.75%, the Swedish currency has overtaken Norwegian kroner in popularity.
Bank Nederlandse Gemeenten launched its first transaction in the currency since 1998, a Skr500m 3.75% February 2008 bond. Handelsbanken and UBS jointly led the issue.
Handelsbanken then led a Skr250m 5.125% January 2014 bond for General Electric Capital Corp, which was quickly oversubscribed.
In South African rand, Rabobank Nederland launched a R200m 9.25% February 2008 deal through bookrunner TD Securities and joint lead Rabobank. The two banks have jointly launched several transactions recently.
Three more borrowers then tapped outstanding deals. The EIB increased two deals, with Landesbank Baden-Württemberg also tapping an issue.
