EIB

The European Investment Bank (EIB) sold its first new Climate Awareness Bond in Swedish krona this year on Wednesday, privately placing a seven year floating rate note. Climate awareness bonds are becoming popular with Swedish investors, who have been providing an increasing share of the investor base of such issues.

Following an unexpectedly heavy week of issuance from European supranationals and agencies, here are the updated funding scores for selected borrowers in the category.

Socially responsible investment (SRI) bonds are making a splash. The IFC, IFFIm, and the EIB have brought deals this year and the African Development Bank has plans to sell its inaugural international trade this year. Principally an SSA product, bankers in the market are split as to whether this is a genuine good thing or a whole heap of greenwash. A market this immature will have anomalies, but that should not stop its development.

The African Development Bank (AfDB) has announced that it plans to issue a Green Bond in the autumn. Meanwhile the EIB was putting the final touches on a €650m Climate Awareness Bond as SSA Markets went to press.

Bank Nederlandse Gemeenten (BNG) may lead a small handful of issuers looking to print deals before investors pack their buckets and spades and head to the beach for the summer. The Dutch agency joins its compatriot Nederlandse Waterschapsbank (NWB) among the names that may well access public markets before August.

The European Investment Bank (EIB) tapped 10 year Swiss franc debt on Wednesday, adding to a string of high-grade issuance in the currency this week. Oesterreichische Kontrollbank Aktiengesellschaft (ÖKB) has already accessed the market, selling a new seven year line on Tuesday, leaving Swiss franc syndicates sanguine on the market’s prospects.

KfW took advantage of a clear issuance window on Tuesday to bring a long-awaited euro benchmark, shrugging off uncertainty over how fast rates will rise in the run up to the Federal Open Market Committee’s meeting on Wednesday. The result was hailed as “encouraging” by market participants who also had the spectacle of a €1bn tap of the EIB’s recent 10 year EARN to take comfort from.

This week's funding scorecard focuses on some of Europe's key supranational and agency borrowers. Forthcoming editions will bring updates from other French, German, Spanish and Scandinavian names.

With sentiment turning against new issues this week after a prolonged rates sell-off, the benefit of front-loading issuance programmes is there for all to see. There has been nothing as drastic as markets shutting down to contend with, but a spate of weak deals this week has proven that the relentless bid that had sustained the new issue market for over six months was not indefatigable.

KfW accessed the Canadian dollar market for the first time this year on Wednesday, selling the largest ever Canadian dollar bond from an international SSA issuer. The deal signifies increased investor interest in the currency, with buyers treating it as a possible alternative to a weakening Australian dollar, and that could inspire further deals in the currency, said bankers.

KfW could follow the EIB into the euro market within the next couple of weeks, bankers said on Wednesday, after the supranational’s €3bn 10 year was successfully absorbed this week, despite the volatile underlying market.

Investor hesitance in the face of a rates sell-off that took up the whole of May and shows no sign of abating has resulted in dwindling enthusiasm for SSA new issues as the EIB and Belgium have found out so far this week.