ESM-EFSF

A sell-off in rates over the last few trading days should support the European Financial Stability Facility’s first trade of the third quarter, said bankers. The supranational mandated banks on Monday for a dual tranche trade in the belly and long end of the euro curve.

The euro market showed its strength for SSA borrowers this week, as Agence Française de Développement succeeded in bringing a deal after requesting a change in its banking licence and KfW kept up its record of raising €5bn with every euro benchmark this year despite a volatile backdrop.

Euro conditions are excellent for public sector borrowers, with Spain pulling in a nearly €30bn book for an €8bn 10 year — which bankers away from the trade said indicated a high presence of quality investors — and KfW raising €5bn after picking a seven year deal over a shorter tenor. Another pair of issuers are now looking to take advantage.

This week's funding scorecard looks at the funding progress various European supranationals and agencies have made in their funding programmes.

The eurozone could be strengthened by the addition of a “small fiscal capability” to deal with economic shocks, one of its leading financial officials said in a panel at Euromoney Global Borrowers' forum on Tuesday, as attention turns to reforming the eurozone — a cause championed by Emmanuel Macron, France’s new president.

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A European Central Bank meeting on Thursday — coupled with a Monday holiday across much of Europe — has stifled public sector euro issuance. But at least one trade is expected later this week, from the European Stability Mechanism.

While SSA syndicate bankers maintain that conditions in euros are still good, there was barely any issuance this week as attention turned to next week’s ECB meeting and a potential snap election looming in Italy. Meanwhile, the European Stability Mechanism and European Financial Stability Facility revamped their funding programmes in light of better than expected funding opportunities in the past few months.

The European Stability Mechanism and European Financial Stability Facility have revamped their funding programmes in light of better than expected funding opportunities in the past few months.

The European Financial Stability Facility blindsided investors this week, printing €6bn of 16 year paper despite having completed its second quarter funding requirements, stretching the tolerance of its €10.8bn book in the opinion of some onlookers.

The European Financial Stability Facility confounded the expectations of syndicate bankers by opting to print €6bn of 16 year paper, despite having completed its second quarter funding programme.

The SSA market has played host to a series of strong deals this week and shows no signs of fatigue, as investors flock to make the most of the glut of supply.