ESM-EFSF

The European Financial Stability Facility mandated banks on Monday for a long five year and a tap of its February 2043 bond.

The European Financial Stability Facility will likely issue a euro benchmark in the five or 10 year parts of the curve next week, according to SSA bankers.

Italy passed a test at the long end of the curve with a final order book of over €41bn for a 30 year syndication on Wednesday — far surpassing its previous record book that was set only last month.

Rating: Aa1/AA/AA

The European Financial Stability Facility rebooted the euro public sector market on Monday with an intraday execution ahead of what SSA bankers expect to be a busy week for supply. Belgium and KfW are already on screens for benchmark trades in the 10 year part of the curve.

Secondary spreads in the euro public sector market have widened ahead of an expected flurry of benchmark issuance next week, with several issuers set to tap the market, according to SSA bankers.

The European Financial Stability Facility sent out a request for proposals on Wednesday, with the issuer likely to kick off its 2019 funding with a big trade in the short to mid part of the euro curve, according to bankers.

Public sector borrowers are confident going into the euro bond market next year, with reinvestments from maturing bonds held by the European Central Bank likely to cap any spread widening from the end of quantitative easing. But political threats — from populists polling well ahead of European Parliament elections in May, Brexit probably in March and the Italian government’s stand-off with the European Commission over its budget plans — are likely to bring volatility, meaning timing will perhaps be more important than in 2018. GlobalCapital brought together European SSAs, investors and investment bankers to discuss what 2019 holds for the euro market — as well as the SRI sector and new technology.

In the last year that sovereigns, supranationals and agencies could enjoy the effects of the European Central Bank’s quantitative easing programme — but still had to cope with the Fed pushing up rates — GlobalCapital’s SSA team used its editorial judgement, with inspiration from GC’s world-famous bond comments and patented BondMarker app, to pick what it felt were the top trades of the year. The team strove to find deals that were not just the biggest — it looked for trades that set pricing markers, were innovative and brave or that made an impression in other ways. GC presents the winners here. Congratulations to the issuers and banks involved.

This week's funding scorecard looks at the progress of Europe's supranationals and agencies as the year comes to a close. Some of the issuers have also set their funding targets for 2019.

The European Stability Mechanism has softened the eligibility criteria for its precautionary credit lines, under a eurozone reform package sealed by the European Union on Tuesday.

Portugal extended its duration with a bond exchange on Wednesday, exchanging two bonds maturing in 2020 and 2021 for taps of bonds maturing in 2023 and 2027.