ESM-EFSF

The euros market for SSAs this week could have a distinctly sub-sovereign flavour. Région Rhône-Alpes has hired two banks to run its inaugural bond issue on EMTN documentation. The deal, a dual tranche effort, will be its first debt issue in over a year and only its third ever, SSA Markets understands.

After a rash of post-Fed issuance, it is clear that investors — at least this week — are a bunch not to be taken for granted. The European Stability Mechanism (ESM), might then well consider a five year deal its best option with which to inaugurate its debt issuance programme. But it needn’t and shouldn’t be so timid.

Plenty of SSA issuers took a big bite out of their funding targets in the short window of issuance between the end of the summer and this week's FOMC meeting. Here we provide updated figures on selected European supranationals and agencies.

There may have been the odd stinker of a deal this year but it is hard to fault SSA borrowers as a group. They went after the money this year with aggression, front-loading programmes and bringing some spectacular deals. Some market watchers were looking forward to the autumn issuance season being something of a repeat of the first three months of the year, but it does not look like that will happen. And that is a good thing.

The European Financial Stability Facility priced a September 2034 note on Wednesday afternoon. The issuer was able to offer a yield over 3%, which produced demand strong enough to allow the leads to print a larger than targeted deal well inside initial price thoughts.

The European Financial Stability Facility could print its longest dated benchmark in over a year this week, after mandating Barclays, Deutsche Bank and Royal Bank of Scotland to sell a September 2034 deal on Tuesday.

This summer many investors have eschewed the opportunity to buy long-dated private placements — despite the alluring levels on offer — because they are worried that volatility in underlying rates means yields could head even higher in a matter of days. They should not use that excuse much longer. If they blink they could miss the best opportunities to snap up SSA issuance this year.

The European Financial Stability Facility sent out requests for proposals on Wednesday, joining a growing pipeline of issuers looking to enter the markets after the Inter-American Development Bank reopened benchmarks markets with the first deal in several weeks.

Ahead of an expected flood of issuance kicking off in the last week of August, here are the updated funding scores for selected European supranational and agency borrowers.

The European Financial Stability Facility (EFSF) priced a heavily oversubscribed five year on Wednesday to leave only €4bn left to raise this quarter and to leave the five year point clear for sister borrower, the European Stabilisation Mechanism’s (ESM), inaugural deal, which is expected to come this autumn.

The European Financial Stability Facility hired banks on Tuesday to run a five year syndication, leading bankers away from the deal to expect another jumbo print.

The European Financial Stability Facility (EFSF) is busy considering banks’ ideas on what to do in its next issuance window next week. With the European Stability Mechanism (ESM) set to begin benchmark issuance later this year and German federal elections, which could throw the eurozone debt crisis back into the forefront of investors’ minds, the issuer should forget about extending maturities and aim to pick up as much cash as possible.