BMO Capital Markets

The European Bank for Reconstruction and Development was able to find good demand to increase the size of its outstanding August 2022 Sofr-linked floating rate note on Thursday, despite huge volatility in the US repo market.

While it is no surprise that a public sector borrower has brought the first floating rate note linked to the euro short term rate (€STR), it was a surprise that a small German agency would bring the inaugural transaction, especially as it is some weeks before the European Central Bank (ECB) is due to begin publishing the recommended new risk-free rate.

SSA issuers turned towards niche currencies this week to meet a range of demand across the Australian and Canadian dollar curves. KfW and the Asian Development Bank started the week printing in Australian dollars, before the World Bank joined them in the currency while also returning to the Maple market.

Bank of Montreal was marketing a senior preferred bond in sterling on Tuesday, one day after Rothesay Life gave FIG investors a chance to put their money in tier two in the same currency. The Canadian issuer started its trade with a 15bp-20bp concession, according to a banker off the deal.

The International Finance Corp (IFC) hit screens this week with its first Canadian dollar green bond. The C$750m ($567m) print was the issuer’s largest ever in the currency, as well as the tightest an international SSA issuer has printed against the Canadian Mortgage Bond (CMB) curve, a large and liquid Canadian dollar benchmark.

SSA issuers of dollar bonds were able to push harder on spread than they have in recent weeks on Wednesday, surprising syndicate bankers away from the deals.

The International Finance Corp hit screens on Tuesday afternoon with its first Canadian dollar green bond. The C$750m ($567m) bond is the issuer's largest ever in the currency.

The dollar SSA market burst into life on Tuesday, but some bankers say that the tight spreads and low yields on offer mean there is little guarantee any of the trades will be easy.

BMO Capital Markets’ SSA banker Lindsay Wortzman is transferring to Toronto, and to replace her the London team have picked up Samantha Cook from Nomura.

Rating: Aaa/AAA/AAA

The World Bank was one of a bevy of SSA dollar issuers raising a total of $8.4bn this week, with most of the trades indicating that investors coming back from the summer were having to decipher a completely different market to the one they left.

The European Bank for Reconstruction and Development had a triumphant debut deal linked to Sofr this week, with the borrower drawing new investors that had never been in its books before.