Euro SSA short end heats up amid ALM demand

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By Burhan Khadbai
24 Oct 2019

The short end of the euro curve is becoming the new sweet spot for public sector borrowers, according to SSA bankers, despite the deeply negative yields in these maturities. The European Stability Mechanism (ESM), Instituto de Crédito Oficial (Ico) and Investitionsbank Berlin (IBB) are all enjoying strong outings with three or five year tenors this week.

ESM was the first, mandating Crédit Agricole, Nomura and UniCredit for a March 2025 euro benchmark on Monday, before opening books with guidance in the mid-swaps minus 7bp area on Tuesday.

As the order book reached over €4bn, the spread was set at minus 8bp. ...

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