ESM-EFSF
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The European Stability Mechanism on Monday took care of all its first quarter funding needs in one fell swoop, drawing a heavily oversubscribed book with high Asian demand that allowed 2bp of price tightening. On-looking SSA bankers said the deal was a good sign for — and likely gave confidence to — Spain, which is bringing its second syndicated benchmark of the year on Tuesday. -
The European Financial Stability Facility (EFSF) and Agence Française de Développement (AFD) became the latest issuers to enjoy a strong euro market this week, and there is more supply to come.
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The European Financial Stability Facility completed its funding for the first quarter with a dual tranche offering on Tuesday, which was priced with minimal concession, according to the leads.
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The European Financial Stability Facility mandated banks on Monday for a long five year and a tap of its February 2043 bond.
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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.
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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.
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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.
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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.
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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.
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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.
