Barclays

European banks are expected to hit the dollar market in force over the coming weeks as they look to take advantage of an extended rally in spreads.

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The high-grade corporate bond market saw some heavily subscribed deals this week, but there are concerns from some corners of the market that primary issuance is showing signs of fatigue.

Italy’s Ferrari in euros and the UK’s Southern Water Services in sterling won strong demand for new bonds on Wednesday, but the slowdown in issuance has got some syndicate officials wondering if the market is already winding down for summer.

Belgium took advantage of more attractive funding conditions in dollars versus euros and strong demand at the 10 year point of the curve to sell its first dollar bond since 2017 on Tuesday. SSA supply in dollars will continue on Wednesday with the Asian Infrastructure Investment Bank and Nederlandse Waterschapsbank bringing socially responsible deals.

The high grade corporate bond market saw chunky books on Tuesday, but there are concerns from some corners of the market that primary issuance is showing “serious signs of fatigue”.

Richie Revill, formerly at Barclays, has joined the boutique Asian investment bank SC Lowy as head of markets for Europe.

High grade corporates poured into the primary market on Monday, with sentiment noticeably higher as the first trial for a Covid-19 vaccine in the US and easing of lockdown restrictions in Europe cheered markets.

Belgium is set to issue its first dollar bond since 2017 as euro funders continue to take advantage of the attractive funding conditions in the currency, with three other public sector borrowers also in the market for dollars.

Unédic, the French agency responsible for French unemployment support, entered the social bond market on a permanent basis on Friday, launching its new social bond framework under which all its debt will be issued from now on. It christened the new programme with its largest bond in 10 years.

The Province of Ontario raised $1.75bn with a rare seven year dollar benchmark on Thursday. The transaction shared the market with a five year from Japan Finance Organisation for Municipalitities.

The UK covered bond market may be about to shrink. Deals maturing this year could well be refinanced at the Bank of England, while issuers could see their mortgage pools shrink as a result of the lockdown.