Currencies

Elation in the euro markets after the first round of the French presidential election at the weekend continues to wash over the public sector bond markets, with the Province of Quebec selling its largest ever benchmark in the currency and Spain printing €5bn of inflation-linked paper.

The European Financial Stability Facility on Tuesday priced a dual tranche deal that bankers are describing as possibly its greatest ever, laying to rest some of its other long dated trades this year that drew criticism. A pair of other issuers have also hit screens in a euro market enjoying what one syndicate head called “probably the best conditions we’ve seen in months”.

India’s Power Finance Corp, which reached out to overseas lenders last month for a $100m-equivalent 10 year borrowing in euros, has failed to attract bids from banks, according to sources.

The result of the first round of the French election has imbued the markets with a fresh confidence, prompting the European Financial Stability Facility (EFSF) to mandate banks for its third dual tranche trade in a row.

Rentenbank added a A$100m ($75.6m) tap to its March 2027 Australian dollar bonds on Monday, a line it has tapped frequently since opening it in September.

A strong showing from Emmanuel Macron in the first round of the French election has been greeted as an “overwhelmingly positive development” by those in capital markets, according to a head of SSA DCM, and provides an exceptional backdrop for the European Financial Stability Facility’s expected benchmark.

Syndication of a HK$7.991bn ($1.027bn) loan for a subsidiary of Hong Kong conglomerate Goldin Financial Holdings is set to wrap up soon, with the money to be used to develop a residential complex in the city’s Kowloon area.

Talks are set to begin in Spain to reform the financing mechanism for the country’s regions, which could lead some to their return to the primary bond market for the first time in years. But as with seemingly everything in bonds this year, politics could yet scupper the efforts, write Craig McGlashan and Victor Jimenez.

The stakes have rarely been higher for a French election. When French voters head to the polls on Sunday, it may be to determine the fate of the eurozone.

Basis swap levels, which have deprived Swiss bond investors of international corporate supply for much of the last year have improved sharply. But issuers are still keeping away with wider spreads to blame.

KfW tapped a four year Australian dollar bond on Thursday, after raising €5bn in the euro market the day before.

Jefferies is building out its CEEMEA trading operations, and eventually plans to add primary markets, derivatives and local currency trading to a revitalised business.