ESM-EFSF

The European Financial Stability Facility attracted strong demand from asset managers and fund managers to a long-dated benchmark on Tuesday. Demand for the deal was robust as it could represent one of the last opportunities of the year for those investors to put cash to work in supranational paper, despite the coupon on offer falling shy of their 3% yield sweet spot.

The European Financial Stability Facility hired three banks on Monday to run a long-dated deal with an unusual maturity.

Read this week's funding scorecard to see which European supranationals and agencies are nearly done for the year, and which have already begun prefunding.

The European Stability Mechanism was able to price its second ever benchmark inside initial guidance on Tuesday as investors piled into the order book despite an auction from the Dutch State Treasury Agency in the same maturity on the same day.

The European Stability Mechanism hired banks to run a 10 year syndication in euros on Monday, surprising several market participants who had expected the supranational to announce a day later.

The European Financial Stability Facility printed a heavily oversubscribed seven year syndication on Tuesday afternoon. Pricing that offered a double digit premium over France, plus banks, asset managers and central banks willing to look further along the curve in search of yield, helped the European bailout borrower to bring a deal at the upper end of size expectations.

The European Financial Stability Facility announced a seven year benchmark on Monday afternoon offering initial price thoughts wide of where the issuer's 10 year debt was trading on a mid-market basis, according to bankers away from the deal. The supranational announced the mandate as Bank Nederlandse Gemeenten failed to get over the line with a five year syndication.

Read this week's funding scorecard to see which European supranationals and agencies are nearly done for the year, and which have room for another benchmark.

The European Financial Stability Facility is set to bring a benchmark next week, having sent out a request for proposals on Wednesday. It has a wide range of options open to it, said SSA bankers, but it will look to avoid cannibalising demand for the European Stability Mechanism’s next — and second ever — deal which will come later this year.

The European Stability Mechanism made a benchmark debut on Tuesday with a five year that came at the upper end of size expectations. Pricing offered a decent premium over where the borrower is expected to trade in relation to its peers, helping to produce a deal that was more than twice subscribed in just 45 minutes. KfW is set to follow with a benchmark in the same maturity.

A pair of issuers could bring euro syndications this week if the European Stability Mechanism has a success on its hands with a debut benchmark slated for Tuesday. Europe’s permanent bail-out mechanism mandated three banks on Monday afternoon for a deal in the belly of the curve.

PART 2: The European Stability Mechanism’s debut benchmark — slated for next week — will not be affected by a US government shutdown or political squabbles in peripheral European countries, says Christophe Frankel, deputy managing director and chief financial officer of the ESM, in an interview with SSA Markets.