Crédit Agricole
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It was another sparkling week in dollars for public sector borrowers, with Asian Development Bank the pick of the bunch as it brought the tightest deal of the year so far versus Libor and US Treasuries. More supply is expected for next week, although some SSA bankers feel the market could do with a “breather”. -
The socially responsible investment market in SSAs is picking up pace in 2019, with a supranational bringing a deal in a debut format and other issuers preparing inaugural trades.
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Wider euro spreads versus swaps and Bunds had already led to some superstrong trades in the currency this year, but Spain outdid them all this week with the largest ever book for a public sector euro benchmark. Every other euro deal also attracted heavy oversubscription with minimal concession, paving the way for expected supply next week from a “large German agency in the short end” and a “central European sovereign in 10 years”, according to one head of SSA syndicate.
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French hotel company Accor launched new hybrid and senior bond issues on Thursday after announcing the deals at the end of last week. The new deals finance tender offers for some of the company’s existing hybrid and senior notes.
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Volkswagen Bank started its funding for 2019 with a hefty four tranche deal on Thursday that will contribute to its minimum requirement of own funds and eligible liabilities (MREL) when the German regulator decides what that should be.
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The public sector dollar market on Wednesday showed that it had more than enough depth to cope with a pair of issuers bringing deals in the same maturity with just a basis point of difference in initial price thoughts, as both trades came in size and at tightened pricing. Another agency is set to dip into the demand on Thursday.
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Following the success of Engie’s green hybrid bond the previous week, the French energy company’s Portuguese peer, EDP, launched its own version on Wednesday. While EDP’s deal did not achieve quite the same demand or tight pricing, the result was still a good one.
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Two SSA borrowers will go head to head in the dollar market on Wednesday, bringing five year benchmarks with only 1bp difference in initial price thoughts.
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Belgium’s Solvay has signed a €2bn sustainability-linked revolving credit facility, as the chemicals company progresses with one of the most ambitious decarbonisation undertakings in its industry.
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Leveraged finance markets in Europe are looking up, and bankers expect they may even see some deals priced before long.
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Spain mandated banks on Monday for its first syndicated bond of the year, as it looks to replicate the success of other eurozone sovereign syndications so far in 2019.
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