EIB

The African Development Bank issued the first green bond linked to the Secured Overnight Financing Rate (Sofr) on Tuesday. The European Investment Bank will look to extend the Sofr floating rate note curve on Wednesday with an October 2021 issue that will use a different coupon formula to the previous Sofr trades.

Public sector borrowers are gearing themselves for wider spreads and bigger new issue premiums in the euro market in 2019 following the expected end of the European Central Bank’s public sector purchase programme. The bigger and more liquid names will determine the environment for the rest of the market, according to SSA bankers.

Secondary spreads in the euro public sector market have widened heavily across the curve with just over a month to go before the European Central Bank is expected to put an end to its Public Sector Purchase Programme. SSAs are also being affected by the political ructions from Italy, Brexit and the global trade war, said bankers.

Public sector borrowers could look to join the European Bank for Reconstruction and Development in pre-funding for 2019 if the market backdrop — such as volatility in the Italian government bond market — improves, said SSA bankers.

The Province of Alberta pipped the European Investment Bank to the top score of the week in BondMarker, with both issuers printing five year dollar globals.

Rating: Aaa/AAA/AAA

Three public sector borrowers shrugged off a rally in US Treasury yields to issue a combined $8.25bn in the primary market this week.

The European Investment Bank received good demand for its second five year dollar benchmark of the year on Tuesday.

The European Investment Bank mandated banks on Monday for a five year dollar benchmark, following a string of short dated floaters in the currency by supranational and agency issuers last week

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

A compelling recent example of the EIB’s role as a “crowding-in” bank is its support for the Althelia Sustainable Ocean Fund (SOF), the first close of which was announced in September.

Public sector bond market participants are growing increasingly frustrated at the pace of the implementation of Ester, the alternative euro risk-free rate to replace Euribor. Borrowers are unable to plan for, let alone issue, a bond linked to the benchmark without the rate being published by the European Central Bank. That leaves the euro far behind other markets where Libor is being replaced, writes Burhan Khadbai.