Citi

Volkswagen stormed back into bonds on Thursday for the first time since its emissions test cheating scandal 18 months ago. And the €8bn blowout that paid investors a chunky premium to allay their fears about the company is just the start of the firm’s market rehabilitation, writes Michael Turner.

Rating: Aaa/AAA

Only one SSA issuer took advantage of strong conditions in the dollar market this week. Bankers said that there could be more supply next week, though most issuers are so well-funded that deals are likely to remain thin on the ground.

World Bank sold a €90m zero coupon 40 year bullet MTN towards the end of last week — its longest ever non-callable deal.

New deals marketed this week by US borrowers Owens-Illinois and Federal-Mogul pushed reverse Yankee issuance to 25% of the €22bn of euro high yield issuance so far in 2017.

South Korea’s Netmarble Games began investor education this week for a potential W2.7tr ($2.4bn) IPO, while ING Life Insurance Korea filed offer documents for its W1.3tr float.

Landlocked South American sovereign Paraguay cemented its status as one of Latin America’s fastest improving economies with a tightly priced 10 year deal on Wednesday.

Turkey’s Turkiye Sinai Kalkinma Bankasi (TSKB) printed the first ever Basel III compliant sustainable tier two on Tuesday.

Halkbank became the latest Turkish bank to throw its hat into the tier two ring on Wednesday, announcing plans for a three day roadshow in the US and UK.

With public sector borrowers having reached advanced stages in their annual funding programmes as the first quarter comes to a close, focus is shifting to socially responsible bonds.

Volkswagen has returned to the public straight bond markets in its own name for the first time since September 2015, when it was swept from the market by its emissions test cheating scandal. Bond markets being what they are, a multi-billion euro blowout is likely.

The socially responsible bond pipeline ballooned on Tuesday, with a European supranational announcing a roadshow for a debut issue, a French agency mandating for a deal and a Washington supranational pricing a social bond in benchmark size for the first time.