Austrian Sovereign

Austria's 100 year bond, priced on Tuesday, highlighted just how far investors will go — and in their droves — to earn a bit of yield, with even the imminent threat of rising rates in euros unable to deter them from placing orders more than three times the size of a deal that was by no means measly. Lewis McLellan reports.

Austria, defying any concerns about the normalisation of monetary policy, launched the first ever 100 year syndication in Europe on Tuesday, exciting investors with a 2.112% yield.

Austria has become the first eurozone sovereign to syndicate a 100 year bond, selling €3.5bn to investors desperate to pile cash into ultra-long paper.

Austria has picked banks for a five year bond to be launched on Tuesday, but may also extend its curve to 100 years.

Oesterreichische Kontrollbank this week became the latest public sector borrower to return to the sterling market after a lengthy absence — and was rewarded with its largest ever issue in the currency at £350m.

Oesterreichische Kontrollbank has mandated banks for its first sterling deal in 1.5 years, joining a host of other public sector issuers to return to the currency this year.

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.

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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.

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.