Currencies

The first two sovereign benchmarks since February are set to hit the market on Tuesday. Although volatility has not yet abated, bankers are eager for the deals to establish new price points for public sector issuers to start funding their responses to coronavirus.

The Free State of Bavaria enjoyed a strong reception from investors as it returned to the capital markets on Monday for the first time since 2014 to fund a Covid-19 fiscal package by the Bavarian government.

Asia’s sustainability-linked loan market has expanded further with a real estate investment trust raising funds linked to the global real estate sustainability benchmark (GRESB), a first for the region.

The Reserve Bank of Australia (RBA) is to start quantitative easing for the first time, it said on Thursday, while earlier this week the Reserve Bank of New Zealand (RBNZ) slashed rates and the New Zealand Treasury set out plans to increase its bond market borrowing.

The State of North Rhine Westphalia (Land NRW) had to pay a large new issue premium on Thursday as it brought the first SSA deal of a volatile week.

The Reserve Bank of Australia (RBA) and Reserve Bank of New Zealand (RBNZ) acted this week to protect their economies against the effects of the Covid-19 pandemic.

Hong Kong financial services firm Sun Hung Kai & Co has returned to the loan market after nearly four decades for a HK$500m ($64m) deal.

The Belgian region of Wallonia has decided to conduct the investor marketing for its euro sustainability benchmark solely over the phone rather than by attending meetings as the Covid-19 pandemic worsens.

The recent fall in the price of oil is having a knock-on effect on non-core currency issuance. While oil dependent markets could take a hit as their currencies weaken, some net importers could benefit from a stronger currency and safe haven flows.

Trading levels given are bid-side spreads versus mid-swaps and/or an underlying benchmark and bid-yields from the close of business on Monday, March 9. The source for secondary trading levels is ICE Data Services.

A window for Kangaroo issuance opened this week, as a positive move in the Australian dollar/euro basis swap helped rouse a slumbering market that had not seen a deal for a fortnight. In spite of unstable conditions, SSAs entered the market on Monday and Tuesday, with a trio of regular borrowers tapping six lines for a combined A$575m ($364m).

Green deals from Hypo Vorarlberg and Russian Railways were sold in Swiss francs this week in what were immensely tricky conditions. The market was awash with deals in January and February, but many feel the spread of coronavirus will bring a halt to the momentum moving into March.