ESM-EFSF
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KfW drew its largest ever benchmark book this week while visiting the seven year tenor, a part of the euro curve that has been red hot for issuers for several weeks and that SSA bankers still has plenty to offer borrowers next week. The European Financial Stability Facility (EFSF) is lining up a deal for next week, although bankers are suggesting it looks at the long end. -
KfW took home €5bn in the seven year part of the euro curve, which has been red hot for a few weeks, with bankers citing low second quarter supply as particularly supportive of conditions and suggesting there is plenty more interest for further trades in the tenor. The European Financial Stability Facility is lining up a deal for next week — although bankers are suggesting it looks at the long end.
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A paper by the parliamentary group of the CDU/CSU, the leading bloc in Germany’s government, has said that fund distribution from a proposed European Monetary Fund should be controlled by the eurozone’s national parliaments. Such a measure would all but nullify the point of creating the EMF — and be a dire signal for hopes of further eurozone integration.
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The euro market is back in gear after a few weeks of slow issuance. Three borrowers have mandated deals for Tuesday’s session but one opted for a one day execution, coming on Monday to get ahead of the rush.
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The euro and dollar SSA markets are set to return to action next week, having taken something of an extended break following the Easter weekend.
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Spain has picked banks for its second deal of the year, looking towards the long end of the curve for the first time since May 2016.
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The State of North Rhine-Westphalia showed that the euro long end is open for core SSAs despite wider market volatility on Thursday, but there was a more testing time for Greece in secondary.
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This week's funding scorecard looks at the progress Europe's supranational and agency borrowers have made in their funding programmes.
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The euro SSA market reacted with commendable calmness to the Dow Jones’s worst day in six years on Monday but moves in the secondary market on Thursday showed that “vol isn’t dead”, according to one head of SSA DCM.
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The European Stability Mechanism has cut more than 20% from its funding target for 2018 after approving a request from Spain to pay back €5bn of its ESM loan ahead of schedule.
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The European Financial Stability Facility (EFSF) gathered a €14bn book on Wednesday, easily covering its €3bn no-grow deal. The no-grow language, plus the pick-up to OATs it offered, likely helped demand, said bankers.
