ESM-EFSF

Société Anonyme de Gestion de Stocks de Sécurité (Sagess) was overwhelmed with demand for a seven year deal on Monday, allowing the issuer to print at the tight end of revised guidance. The level of demand and restricted deal size made for a tough allocation process for the four bookrunners.

The EFSF is most likely to plump for a five year when it mandates for an expected benchmark early next week, SSA bankers told SSA Markets on Friday.

Last autumn the SSA market stood clear while the EFSF tried to ram a 10 year deal down investors’ throats. Next week’s anticipated five year EFSF deal should demonstrate how far the borrower has evolved.

The EFSF has despatched an RFP to dealers for a trade which is anticipated to come next week, and bankers expect the EU to follow with a benchmark after that. The two borrowers are among the few SSA names with much funding left to do before the end of the year.

KfW has mandated a trio of banks to run a seven year euro trade in what could be the only euro benchmark of the week.

First, the EFSF was expected to send out an RFP for a benchmark deal this week. Now it seems the wait may be even longer, with syndicate bankers not expecting requests to go out until the middle of next week at the earliest.

A pair of European supranationals are expected to revive euro supply in October, following a two week pause in SSA benchmark issuance in the currency. Dollars hogged the limelight this week and three days of public holidays in China next week is likely to keep many borrowers away until October 8.

FMS Wertmanagement broke its sterling commercial paper record and the EFSF sold three month treasury bills with record low yields as the latest bad news from the eurozone led short term investors to shun yield for safety this week.

The European Financial Stability Facility was set to price the second 10 year euro benchmark of the week on Wednesday afternoon. However this deal, unlike the barnstormer from Finland a day before, was set to price at the wide end of guidance.

The European Financial Stability Facility has mandated three banks to run a 10 year euro benchmark. The mandate came straight after a 10 year from Republic of Finland flew out of the gates Tuesday morning.

Next week the issuance calendar looks less like a pipeline and more like a bunfight. The pressure’s on to get funded ahead of a messy September, and borrowers will be tempted to cram deals in. But they must be cautious.

Several borrowers are lining up benchmarks despite a decline in investor sentiment this week. Issuers face a choice between risking potentially tough conditions and overcrowding to get funding done ahead of September — a month they fear could be a disaster — or waiting.