Currencies

On Wednesday, German chemicals supplier Lanxess found a surprising lack of demand for its first corporate bond issue since September 2016. Onlookers suggested this is was not a good sign with a heavy pipeline building for future weeks.

On Wednesday, US car manufacturer Ford’s finance arm followed its recent trend in using the euro corporate market to fund itself in floating rate note format. The company kept its tenors short with a pair of FRNs, but found investors had a preference the shorter option.

Italy’s bonds took a hit on Wednesday afternoon after the country’s president Sergio Mattarella allowed the Five Star Movement and the Northern League — the best performing parties in the country’s general election in March — 24 hours to form a government before he appoints a non-partisan prime minister.

Commodities trader Trafigura Group Pte. will meet Swiss investors next Tuesday to discuss an inaugural Swiss franc bond.

Investors are confident Italian spreads will stabilise after the sovereign widened versus Germany over fears of a potential second general election of the year. There was some evidence of that on Wednesday morning as the country’s yields reversed some of their losses.

Goldman Sachs sold its largest amount of Swiss franc bonds in a single Sfr325m issue on Tuesday afternoon, encouraging hopes that the Swiss franc might be regaining its status as a global funding currency.

The Dutch State Treasury Agency will clear its interest rate swaps at the clearing arm of German derivatives bourse Eurex, it was revealed on Tuesday.

The US corporate bond market has enjoyed strong new issuance volumes in the last two weeks, while the European market has been much quieter. But in emerging from two weeks shortened by public holidays, Europe is preparing to close the gap.

More widespread use of the International Monetary Fund's special drawing rights could prevent a currency war, Thierry de Longuemar, chief financial officer at the Asian Infrastructure Investment Bank (AIIB), said on May 4. But the treasurer got little sympathy from other experts at the Asian Development Bank’s meeting.

Green bonds have become one of the hottest topics in finance, taking their place alongside project finance and China’s Belt and Road as the necessary buzzwords on every investor’s lips. But green financing is more than just a passing fad for Japan’s strongest issuers. In a market defined by a famously rigid investor base, they are attempting to build a market that can be sustainable in every sense of the word. GlobalCapital sat down with some of Japan’s leading issuers, analysts, bankers and policy bankers to discuss where green and social financing is heading.

It might be easy to imagine that Japan’s top credits have an easy time accessing the international bond market. Compared to high yield or debut issuers, that may be so. But a strong rating and an important role in public policy bring with them certain responsibilities — not least of which is keeping funding costs down. The rise in dollar interest rates, and the volatility that is sure to result, thus represents a conundrum for these issuers. What is the right price for a dollar bond? What is the correct attitude to maturity adjustment? GlobalCapital asked these and other questions during a roundtable discussion that took place in Tokyo shortly before the end of the fiscal year on March 31, 2018.

Japanese investors’ desperation to boost their yields is helping them shed an ultra-conservative image that has long defined them. The move is overdue but as more international borrowers turn to the yen markets for funding, the increasing flexibility of the buy-side is helping to usher in new structures and international standards. Rashmi Kumar reports.