EIB

A pair of triple-A SSA borrowers built heavily oversubscribed books — and one printed its largest ever deal — on Wednesday in a dollar market that is still attracting heavy demand and performing in secondary despite already tight levels.

A strong start to the year for public sector dollar issuance is keeping up the pace so far this week, with last week’s slowdown during the Chinese New Year holidays only appearing to make investors hungrier. Both of Tuesday’s dollar deals were well oversubscribed — one spectacularly so — and there is a full card of issuers waiting to come on Wednesday.

The theme in the euro public sector market this week was large book sizes despite issuers paying very little concession, with Finland, the European Investment Bank (EIB), Madrid and the Joint Länder all keeping close to their curves.

Rating: Aaa/AAA/AAA

All three public sector borrowers in the euro market on Tuesday received record order books, despite the spreads tightening by up to 5bp during pricing — which left little to no concessions for investors.

The European Investment Bank on Monday selected the five year part of the curve for its second euro benchmark of the year. The issuer will be hoping to replicate the recent success of public sector agencies in that tenor, including KfW, which achieved a record breaking book for its five year last week.

Concerns over the UK’s exit from the European Union, which have increased following Tuesday’s series of votes in parliament on the matter, will not affect demand for sterling SSA paper, according to bankers.

The European Investment Bank showed there was ample appetite for sterling SSA paper on Wednesday, despite Tuesday’s vote in the UK Parliament that left more uncertainty over the eventual outcome of Brexit.

The European Court of Auditors (ECA) issued on Tuesday a report criticising several core elements of the European Fund for Strategic Investment (EFSI) — the so-called Juncker investment plan.

This week's funding scorecard looks at the progress supranationals have made in their funding programmes.

The European Investment Bank, European Commission and EU member states are struggling to decide how to run InvestEU, a €47bn guarantee from the EU budget supposed to support €650bn in investment, as a successor to the Juncker plan. The Commission is seeking more direct control, while the European Bank for Reconstruction and Development is also after a bigger role.

A record start to the SSA sterling market came to a halt early this week, with borrowers avoiding prints as the UK Parliament delivered a historically large defeat to the government over its planned withdrawal agreement with the European Union. But once the big risk of the event was out the way, supply picked up — although with Brexit’s direction as uncertain as ever, further blocks to issuance are likely.