ESM-EFSF

Sovereign, supranational and agency issuance planning for 2012 lay in tatters after last week’s Eurogroup summit left issuers and their advisors riddled with uncertainty. Although funding volumes are known, plans of campaign are limited to taking a wait-and-see approach as issuers face up to increased scrutiny, wider spreads and smaller deal sizes.

The European Financial Stability Facility (EFSF) auctioned its first short term debt instruments on Tuesday morning. It achieved a yield in line with what the French have to pay for the same maturity. Meanwhile, fellow bailout borrower the European Union is understood to be poised to launch a new issue.

The European Financial Stability Facility is to brave the risk of failed offerings by starting to auction short term bills as early as next week.

This week’s Eurozone crisis summit is unlikely to satisfy investors and end the volatility that has paralysed markets in recent weeks, bond players said on Thursday afternoon. Key steps including committing to an aggressive European Central Bank buying programme, clarifying fiscal union and transforming the European Financial Stability Facility into a bank seem remote amid continuing political wrangling.

Standard & Poor’s placed 15 eurozone sovereigns on CreditWatch with negative implications on Monday. Six of those countries, including Austria, Germany and the Netherlands, are rated triple-A.

The positive tone to the European government bond market this week could be short lived if Europe’s leaders fail to tackle the continent’s fiscal problems at next week’s summit, warned bankers.

Italy successfully navigated its planned five year bond auction on Monday morning but any relief on the part of investors is tempered by scepticism over the quality of the sale. French yields rallied but that sentiment may be short-lived, said bankers, as investors targeted Spanish Bonos.

The European Financial Stability Facility’s (EFSF) 10 year print on Monday drew few plaudits among capital markets participants. The deal was criticised for coming when demand was too thin to support it and of ruining the chances of peer issuers to bring deals.

The European Financial Stability Facilty (EFSF) is preparing to print in the money markets to support its benchmark issuance. The first deals could be printed as early as December.

The European Financial Stability Facility tried to entice investors into its second tilt at a €3bn 10 year bond in two weeks on Monday morning with a novel pricing technique. Opinion was mixed as to whether the ploy had worked ahead of pricing.

The European Financial Stability Facility (EFSF) is set to price a Eu3bn five year deal on Wednesday afternoon, having closed books late in the morning with a book over twice subscribed.

The European Financial Stability Facility (EFSF) has priced its second five year deal with no new issue premium. The deal is the only benchmark mandate to be launched and priced this week so far.