EIB

The EIB opened its EARNs programme for the year on Thursday with a successful five year deal that achieved giant size, tightened pricing and a sub-Libor reoffer level. The deal was the latest example of how much January 2013 has so far felt like a return to pre subprime crisis days in the SSA market.

The European Investment Bank priced its first Swiss franc trade of the year on Thursday, but the deal stayed at the minimum size. Given an expensive euro/Swiss franc basis swap, bankers away from the trade questioned whether the deal may have been better saved for another day.

The Inter-American Development Bank (IADB) and the Asian Development Bank (ADB) are set to answer the burning question in the SSA dollar market on Tuesday as they attempt to find the price at which the apparently rampant appetite for SSA dollar paper extends to tightly priced supranational credits.

The Italian treasury has wasted no time in returning to the syndicated benchmark market this week by awarding four banks the mandate for a new bond, following a stellar opening week for SSAs. Meanwhile, the European Financial Stability Facility (EFSF) has also elected to return to the new issue market and other borrowers will not be far behind, say senior bankers.

Friday saw a flurry of activity in the 10 year area of the curve in Australian dollars, with supranationals looking to take advantage of yield hungry investors pushing along the curve and a favourable basis swap.

The EIB continued a rush of early year funding on Thursday, tapping 12 year euro bonds in order to take advantage of lively trading in the supranational’s long dated debt.

The EIB sold its second sterling bond of the year on Wednesday morning— a tap of a four year floating rate note. The deal was instigated by leftover demand from bank treasuries after the supranational’s sterling benchmark last week.

KfW left a distinctly bullish hoofmark on the dollar market on Tuesday afternoon, mandating three banks for a 10 year global. It will be the first issuer to print in what is often a tricky tenor in dollars, and the deal comes as books on the first dollar benchmark of the year — a five year global for the European Investment Bank — swelled to over $7bn. Kommunalbanken has also mandated for a five year.

The European Investment Bank (EIB) and Kommunalbanken (KBN) are expected this week to test investor appetite for dollar SSA paper for the first time in 2013. Bankers and issuers alike will watch the deals with interest to assess the balance between investors’ need for paper and willingness to endure eye-wateringly tight reoffer spreads.

The EIB laid down a statement of intent with its £1bn blockbuster this week. The European supranational’s opener for the year suggests it is trying to get maximum cash through the door while the going is good. Despite the positive market tone driving some issuers to wait and see rather than pile in, they should tend towards the EIB’s tactics.

The European Investment Bank (EIB) was the first SSA out of the blocks this year, picking sterling to start its year’s funding by pricing a whopping £1bn benchmark on Thursday afternoon. The deal, whose books reached £2bn, follows several meetings with sterling investors during the last quarter.

Buoyant conditions on the first proper day of trading after the Christmas break indicate that SSAs are in for a red hot start to issuance next week when as much as €25bn of benchmark issuance could hit screens. But ultra low yields could mean issuers have to cough up when it comes to new issue premia.