ESM-EFSF

SSA syndicate bankers are predicting either a seven year benchmark from the European Financial Stability Facility (EFSF) next week, or a deal at the far end of the curve, after they made their recommendations to the borrower this week. The European Investment Bank and KfW are also expected to issue either next week or the week after.

The European Financial Stability Facility (EFSF) priced on Thursday a €5bn 10 year benchmark as it starts to build a new curve of tappable benchmarks. The deal came at the tight end of guidance having attracted a hefty order book despite heavy SSA supply in the euro market already this week.

The EFSF has mandated three banks for a 10 year benchmark deal, which, should it go well, will wrap up a stellar week for borrowers associated with Europe’s sovereign funding crisis. The bail-out vehicle will follow a thumping €7bn sale in 10 years from Spain on Tuesday and what looks to be a successful €6bn 30 year sale from Italy on Wednesday.

Bank Nederlandse Gemeenten priced a €1.25bn five year note on Tuesday at a level that skimmed its curve, according to one of the leads.

The EFSF sent out requests for proposals on Tuesday ahead of a deal expected for next week. Bankers expect the issuer to use next week’s window to print at the long end of the curve. The supranational has also expanded its funding target for the quarter in response to better than expected market conditions.

The European Stability Mechanism (ESM) has laid out its funding plans for the rest of the year, including how many benchmark trades it plans to issue. The funds will go towards refinancing debt taken on for the Spanish bank bailout as well as part of an expected €9bn to raise for Cyprus.

The EFSF issued its second tap deal in a week on Monday as it prepares for Cyprus to step out of being one of its guarantors. Once Cyprus leaves the guarantee structure, the EFSF will no longer be able to tap bonds issued before that date, which is expected to be this week. Unédic, meanwhile, has hired four banks for a short-dated euro issue.

The European Financial Stability Facility (EFSF) tapped a three year bond for €1.5bn on Wednesday afternoon. It was joined in euros by the State of Saxony-Anhalt, which priced a heavily oversubscribed 10 year benchmark at a tight price earlier in the day.

Demand for a five year benchmark from the European Financial Stability Facility on Tuesday exceeded expectations, allowing the borrower to print its biggest ever syndication and at a small concession to secondaries. The European bailout borrower was joined in euros by the Republic of Finland, which was set to price an oversubscribed €4bn 10 year as SSA Markets went to press.

Finland and the EFSF announced mandates for euro benchmarks on Monday afternoon.

The European Financial Stability Facility (EFSF) brushed aside concerns that volatility caused by Cyprus bailout negotiations could hurt demand for its debt on Wednesday, when it brought a tap of its €3bn 0.5% March 2016s flat to the outstandings.

Nederlandse Waterschapsbank mandated three banks to run a three year dollar deal on Monday, thumbing its nose at any volatility caused by a bailout package for Cyprus announced at the weekend [see separate story].