Canada

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.

Three dollar borrowers have hit screens in a market buoyed by a pronounced Treasury sell-off.

Endeavour Mining, the Toronto-listed, UK-headquartered gold exploration company active in west Africa, has raised $300m to refinance debt with a debut five year convertible bond issue that was well subscribed, according to several sources close to the deal.

Entertainment One, the Canadian record label and entertainment company, has raised £53m, in an accelerated bookbuild, to partly finance its acquisition of the remaining shares in The Mark Gordon Company, the Hollywood production company behind films such as Saving Private Ryan, in which it already owns a 51% stake.

Data releases by a number of monetary authorities show uneven turnover in RMB-denominated FX transactions around the globe.

Public sector borrowers this week set new landmarks in what has already been an exemplary year in dollars, as KfW sold the largest 10 year dollar benchmark in 2.5 years and the Nordic Investment Bank priced the tightest deal versus swaps of 2018 so far. SSA bankers are confident that conditions will hold at both ends of the curve — allowing the possibility of further long end supply and even lower short end spreads.

Guarantor: CPP Investment Board

Public sector borrowers wrapped up a trio of short end dollar trades on Tuesday, with the tightest issuer able to grind in pricing to the lowest level from an SSA this year and the higher yielding names finding ample demand despite ending up at similar spreads. SSA bankers are confident that the strong conditions will also ring true at the long end for KfW, which has mandated for its first 10 year dollar benchmark in nearly three years.

Public sector borrowers are pouring into the three year part of the dollar curve after a series of issuers printed strong deals in the tenor last week.