Canada

Fairfax Financial Holdings, the Canadian holding company of a number of insurers and reinsurers around the world, has announced a roadshow for a deal in euros.

Swedish Export Credit Corporation on Wednesday priced what bankers away from the deal said was a “very strong trade”, as it printed in the same five year tenor that has brought success for SSAs over the last few weeks. But one borrower is set to attempt a tenor that has not been visited since late January.

Bank of Montreal offered investors a €500m four year floating rate bond on Wednesday, continuing a trend of issuers looking at the FRN format. The order books were thinly subscribed despite the defensive format of the trade.

National Bank of Canada and Commerzbank both came to the market with seven year covered bonds on Tuesday.

Toronto Dominion Bank this week issued a €1.25bn short five year euro covered bond with a modest concession that matched the record tightest Canadian euro covered bond spread, albeit with a rather low subscription ratio.

Guarantor: CPP Investment Board

Three public sector borrowers hit screens in euros on Tuesday, taking advantage of a hot market to offer zero or limited new issue premiums.

The European Union’s upcoming April 2033 euro benchmark may have to offer a little more premium than usual if it wants to match a similar trade from the European Investment Bank last week and attract strong French demand, said bankers away from the mandate. Other euro supply in the pipe includes CPPIB Capital — also with a 2033 issue — and Rentenbank in sevens.

The outlook for Canadian covered bond supply in euros is not as grim as it seems, despite the fact that the nation’s lenders have already issued three quarters of what they supplied in euros In 2017, the cross currency basis swap is not particularly compelling and senior unsecured funding is cheap in dollars.

The SSA market showed its “resilience” to the horror show in US equities early in the week as a series of borrowers printed strong dollar trades — one with its largest ever book, another with its largest size in years and not one paying up for the privilege. Some bankers suggested they may have benefited from a flight to safety but the general sense was that if the volatility comes back, public sector borrowers need not worry.

Rating: Aa2/A+/AA-

Public sector borrowers are reaping the benefits of investors looking to “weather the storm” of wider market volatility, said bankers, as investors poured cash into short dated dollar issues this week. Bank Nederlandse Gemeenten and Sweden are set to be the next issuers to benefit, after mandating for three year trades on Tuesday.