Currencies

Guarantor: Federal Republic of Germany

Investors turned out in force as KfW brought its first benchmark green bond of the year this week. The strong demand allowed the German agency to print its joint biggest ever green bond on the back of its largest ever order book for such a deal along with an attractive pricing advantage over a conventional bond.

The Swiss franc market is having a busy year, with a strong showing from corporate and SSA issuers helping the market to its highest year to date volume since 2015, according to Dealogic.

The euro SSA market has grown used to investors flush with cash, itching to buy anything that comes on screens with a good enough rating. But with the EU preparing to issue more than €850bn over the next few years, the balance will shift against issuers, and they must be prepared.

KfW made a strong return to the benchmark green bond market on Tuesday, taking advantage of a more attractive pricing dynamic for green bonds over conventional issuance compared to earlier in the year.

While bankers in the Northern hemisphere plan well-deserved summer breaks, the Australian and New Zealand dollar markets are set to remain open for business, with some competitive pricing on offer.

Chinese food and beverage company Bright Food’s ability to court investors and push for a tight price for its euro-denominated bond shows the benefits ─ and downsides ─ of an aggressive approach to the euro market.

KfW will lead the charge in the euro public sector bond market on Tuesday with a €3bn green bond that will match its biggest ever deal in the format. Eurofima and the State of Berlin are also preparing to bring bonds to the euro market.

Caisse des Dépôts et Consignations (CDC) is planning to return to the Swiss franc bond market in the latter half of 2020 after an 18-month absence to refinance an upcoming redemption. Elsewhere, the Canton of Geneva returned to the market for the third time this month as it marches towards a record year on the capital markets.

Caisse des Dépôts et Consignations issued its yearly Samurai bond on Thursday, raising ¥20bn ($190m) with a dual tranche.

Chinese food and beverage company Bright Food sold a euro-denominated bond via its Singapore arm on Wednesday, raising €800m. It leaned on Chinese bank support to price the deal at a tighter level than where European investors were willing to buy.

Demand for Australia and New Zealand’s first syndications of their 2020-21 fiscal year was high on Tuesday, with both issuers printing their second largest ever deals.