BNP Paribas

The European Investment Bank won a huge reception from investors for its debut €STR-linked floating rate note (FRN) this week, ignoring concerns about a lack of demand amid negative rates in the euro market. While there is a lack of clarity about calculating €STR bonds’ fair value and on Euribor’s future, public sector borrowers are expected to embrace the risk-free euro rate.

Investor sentiment is turning against primary emerging market bonds. Investors’ newfound discipline, a host of new issues in the market, and a volatile backdrop has meant that several trades this week were letdowns. Now, investors are vowing to be more cautious in the coming weeks. Even if US rates are cut further, yield no longer trumps all other concerns, writes Francesca Young.

Finland’s Mesto has signed €800m of revolving credit facility, as the industrial machinery company builds up its cash war chest in preparation for its partial demerger.

There were no fireworks as the World Bank issued its longest ever euro benchmark on Wednesday, with the last book update showing a lower volume of orders than the deal size.

Investors warmly welcomed the first benchmark €STR-linked floating rate note on Wednesday, brushing aside previous concerns about a lack of demand for euro FRNs as a result of deeply negative rates in the currency.

Italy’s first inflation-linked syndication in more than two years hit the market on Wednesday and raised €4bn from a book of €22bn, far outstripping the €6.4bn book for its previous linker sale.

Swiss investors’ thirst for yield was quenched in some style at the end of last week, when Russian Railways printed the largest Swiss franc transaction of the year from an emerging market borrower.

Neoen, the French renewable energy company, returned to the capital markets on Wednesday, following its popular €697m IPO in October last year, with a debut €200m convertible bond due in 2024.

Cathay Pacific cruised to a Hong Kong dollar deal at the end of September, just days after it began a roadshow for a new dollar transaction.

Oesterreichische Kontrollbank hit screens on Tuesday with its first ever sustainability bond, raising €500m with an eight year benchmark.

After mandating banks last week to explore a three year benchmark €STR-linked floating rate note, the European Investment Bank is moving forward with the deal, with initial price thoughts released ahead of an expected launch on Wednesday — the day the rate starts being published by the European Central Bank. However, some market participants have questioned the extent of investor demand for euro FRNs with negative rates commonplace in the currency.

The UK’s Royal Mail obtained chunky orders for a seven year euro bond issue on Tuesday, bringing home to bankers how much money is still in the system, despite the heavy issuance of corporate debt in the past month.