BMO Capital Markets

L-Bank issued its biggest single bond in dollars this week while the Inter-American Development Bank (IADB) printed its first ever dual tranche trade in the currency. But some market participants warned that the good times at the short end of the dollar curve might be coming to an end.

World Bank hit the Canadian dollar market on Wednesday to begin its 2019/20 benchmark funding programme. It followed the European Investment Bank and KfW which have also been active in non-core currencies this week.

SSA names found the going varied in dollars on Tuesday, with the Inter-American Development Bank only just covering the minimum size of its tightly priced short end trade while Land NRW and L-Bank saw chunkier demand.

A trio of issuers burst into the sovereign, supranational and agency dollar market on Monday, as syndicate officials say they have been pleasantly surprised by how quickly the sector bounced back after a tricky period.

The Bank of Montreal followed Toronto Dominion’s lead on Wednesday to join the Canadian bail-inable Kangaroo frenzy, placing A$750m of five year debt.

Last week’s tightly priced bond issue by KfW has inspired a slew of issuers to print three year dollar notes this week. The Asian Development Bank was first off the blocks on Tuesday with a new benchmark, while a tight Export Development Canada trade followed the next day.

The Inter-American Development Bank ducked into the market with a $250m tap of its March 2022 floating rate notes on Thursday, printing the deal in line with guidance.

Last week’s tightly priced bond issue by KfW has inspired a slew of issuers to print three year dollar notes this week, a banker said. The Asian Development Bank was first off the blocks on Tuesday with a new benchmark, and Export Development Canada and Erste Abwicklungsanstalt are set to follow.

Royal Bank of Canada’s €1.25bn seven year issued on Wednesday dropped more orders than any covered bond has in years, ending up as one of the least subscribed deals of its size since 2011. The transaction starkly illustrated that the balance of power has shifted in favour of investors and offered a salutary lesson for ambitious issuers, writes Bill Thornhill.

Bank of Montreal (BMO) has issued the first Canadian covered bond in dollars this year, raising $1.75bn of funding at a cost that was equivalent to what it would have theoretically paid in the euro market. National Bank of Canada was quick to follow, announcing a similar deal at the same starting spread.

The Inter-American Development Bank hit screens on Monday afternoon for a new June 2029 dollar benchmark. The note is the IADB's first 10 year benchmark of the year and other SSA issuers are circling, ready to enter the market if this deal goes well.

CDP Financial and Swedish Export Credit Corp (SEK) were the only SSA names to brave a volatile dollar market this week, and both deals got across the line.