Currencies
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While European Central Bank president Mario Draghi kept firmly to his course of accommodative monetary policy at Thursday’s press conference, the euro strengthened further against the dollar, dragging Bund yields up with it. Lewis McLellan reports. -
Italy’s leading gas distribution company Italgas was the latest issuer to benefit from the lack of corporate bond supply so far in 2018, tapping a deal on Tuesday. Investors, starved of paper, have caused order books to be multiple times oversubscribed and issuers have benefited from tight pricing as a result.
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Corporate bond investors were offered 10 year and 11.5 year new issues on Wednesday and combined order books of over €4.4bn showed there is significant demand for longer tenors in this market.
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Italian tyre company Pirelli returned to the bond market on Monday for the first time since its IPO. With no other investment grade deals in the market, the new five year transaction enjoyed strong investor demand and 40bp of tightening from initial price thoughts.
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Syndicate desks and investors have been quietly voicing concerns about the lack of a firm pipeline in the corporate bond market. Going into the final week of the month, January volumes of new issuance are likely to come in under that registered in 2017, although a trio of French issuers did alleviate some of the pent up demand this week.
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SNCF Réseau has hit screens for a 30 year bond to be sold this Friday. The borrower announced the mandate just after the completion of the European Central Bank's governing council meeting press conference on Thursday.
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Demand for SRI bonds and favourable basis swaps are boosting the Swedish krona market for SSAs, despite concerns late last year that the Swedish central bank’s tightening monetary policy and the krona’s appreciation against the dollar could stifle issuance. The European Investment Bank, Nordic Investment Bank and African Development Bank all came at the long end of the krona curve this week.
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The European Investment Bank tapped its February 2028 line for A$400m ($323.5m) on Thursday, despite strong headwinds in the Aussie dollar market.
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French video game publisher Ubisoft Entertainment sold its first corporate bond on Thursday following a roadshow earlier in the week. The meetings in Paris, London and Germany helped the publisher of games including Assassin’s Creed and Just Dance build a whole new following.
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Corporate bond investors were treated to a relative feast of issuance on Wednesday following a meagre €850m of supply in the first two days of the week. A trio of higher beta names offered a variety of tenors and spreads for investors to choose from.
