EIB

KfW has opened books on its first ever green Kangaroo bond, which is only the second syndicated deal in the format from an SSA issuer.

The European Investment Bank this week sparked a vehement discussion over new issue premia in euro benchmark issues in the era of European Central Bank quantitative easing.

The EIB has tapped the largest outstanding green bond in the market and could have created the first negatively yielding primary supply in the format, said SSA bankers.

Supranational and agency borrowers plunged into dollars this week after the quietest January of issuance since 2007 led to white hot demand and the biggest ever single week of for new issues. Despite the onslaught of supply, not one of nine benchmarks, including a $500m green bond, fell shy of full subscription.

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Public sector borrowers will feel the pressure in February to catch up on funding after the European Central Bank all but stopped new issuance at the end of January — SSAs’ busiest month of the year. The announcement of quantitative easing caused bond yields to tumble and left issuers and bankers puzzled over where they could price a new benchmark.

Despite a strong backdrop for issuance this week few SSAs are willing to bring benchmark deals in euros, as issuers wait until the full effect of the European Central Bank’s quantitative easing announcement last week plays out. Meanwhile, the next meeting of the US Federal Reserve’s Federal Open Market Committee and a winter storm approaching New York are limiting dollar issuance windows.

Asian Development Bank raised over A$1bn ($808.3m) with a new five year Kangaroo and a tap of a 10 year line in the format on Friday, while European Investment Bank topped up its May 2018s to A$1bn. Bankers expect more supply in Australian dollars from public sector borrowers next week.

The European Investment Bank and KfW completed their first sterling deals of 2015 on Thursday, 8 January, in what bankers said was a sign of more to come, as the sterling/euro basis swap is well in favour of euro based issuers.

Strong demand from domestic banks enabled European Investment Bank to print its largest transaction in Norwegian kroner since June 2013 on Thursday.

European Investment Bank and KfW found strong demand in sterling on Thursday as bank treasuries, central banks and real money accounts piled in for a piece of the issuers’ inaugural deals in the currency for 2015.

A bevy of issuers hired banks on Tuesday to run dollar deals as Rentenbank opened the market with a 10 year. The German agency’s deal attracted a level of demand that surprised bankers away from the trade, particularly given punchy pricing and a rally in US Treasuries.