Crédit Agricole

Issuance of sustainability-linked bonds is set to resume next week, after a year’s hiatus since the product was introduced by Enel, the Italian power and gas company. Many possible deals have fallen by the wayside, as market participants have realised the structure is more difficult to use than they had thought. But Suzano, the Brazilian paper company, will roadshow an issue on Tuesday and Wednesday and other transactions are expected in the coming months.

Europe’s high grade corporate market continued to offer plenty of demand for riskier structures this week, with multiple hybrids again taking up screen space.

A trio of European SSAs raised a combined $6bn with five year dollar benchmarks this week. Kommunalbanken, the European Stability Mechanism and Nordic Investment Bank all hit a “very deep pocket” of demand in the tenor.

Senior deals from Banco de Sabadell and Mediobanca underlined the pricing benefits of printing in green formats this week, with both coming inside conventional curves. Other issuers could be tempted to follow.

Daimler blasted far through its conventional bond curve with its €1bn debut green deal on Thursday, in a first for the European automotive industry that is expected to herald a spate of similar issuance — and could reset expectations about the difference between green and conventional bond pricing.

In a busy week for European sovereign sustainable issuance, Municipality Finance took the chance to sell its debut social bond — the first in the format from any Nordic SSA.

BOSC International, Bank of Shanghai’s investment bank, took an aggressive approach to pricing its $300m bond on Wednesday. Investors balked at the issuer’s strategy, forcing it to settle for a much smaller deal than planned.

China Merchants Bank (CMB) sold its first green bond on Wednesday, taking $800m on the back of support from sustainability-focused investors.

Banco de Sabadell on Wednesday looked to replicate the success of Mediobanca earlier this week in capitalising on appetite for green bonds. Appetite for the Spanish lender’s inaugural green preferred senior bond led it to print the deal through fair value.

The European Stability Mechanism hit dollar the market on Wednesday with a five year benchmark — its fourth ever in the currency. Two Nordic issuers are set to follow suit on Thursday.

Germany received overwhelming support for its debut green bond on Wednesday, which was sold via syndication and twinned with a conventional Bund of the same maturity and coupon in what it is a brand new structure for issuing green debt.

Industrial and Commercial Bank of China used its Singapore arm to raise more than planned from a dual-tranche bond on Tuesday, taking a total of $1.8bn after tightening pricing by 40bp on both portions.