Austria

KA Finanz’s plans to convert into a wind down institution will strengthen its link to the Austrian state, but uncertainty over the regulatory and credit rating status of its covered bonds could cause its spreads to widen, said analysts this week.

Kommunalkredit has invited noteholders to tender a trio of Swiss franc covered bonds.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark as of Thursday's close. The source for secondary trading levels is Interactive Data.

The French presidential election saga has taken another twist, with far-right candidate Marine Le Pen’s chances slipping — but those of Jean-Luc Mélenchon, from the other extreme of the political spectrum, rising. Asian investors are pulling back from deals until the election hurdle is cleared, say issuers — but the rise of Mélenchon may also provide an earlier than expected relief rally.

Rating: Aa1/AA+/AA+

Wobbles in eurozone government bond secondaries this week failed to deter a strong showing from a pair of public sector issuers in primary on Tuesday. Unédic found strong demand and tightened from guidance on its longest dated benchmark ever, while Austria broke a series of records with a 10 year euro benchmark.

The pace of borrowing has slackened for public sector borrowers as Easter approaches but a few are still out hunting for second quarter funding.

Erste Bank picked banks to arrange its return to the additional tier one (AT1) market on Tuesday, as the Austrian credit looked to capitalise on lower funding costs and renewed appetite for debt from country’s banks.

There were four equity block trades in EMEA on Tuesday evening, the largest of which was a capital increase by Carl Zeiss Meditec, the German medical technology company.

Volksbank Wien could be preparing to launch its first publicly syndicated euro covered bond after Moody’s published a presale report and assigned a top rating to its covered bond programme on Thursday.

Austria’s Hypo Noe and Poland’s PKO Hipoteczny have mandated leads for roadshows that begin in mid-March and which are likely to be followed by deals.

A trio of eurozone government borrowers are rumoured to be mulling deals in the coming weeks, with conditions at the long end in euros looking stronger than earlier in the year.