Euro

The Riksbank, Sweden’s central bank, is adding a “negative screening” process to its purchases of corporate bonds under its quantitative easing programme, meaning it will no longer buy the bonds of the most polluting companies.

Deal arrangers expect that next week will be the last real window for issuance in 2020, with investors set to close down activity from the middle of December.

Two public sector borrowers hit the euro bond market on Wednesday, raising what might well be the final benchmark funding of 2020.

Investors were delighted to add more exposure to Macquarie Group on Wednesday, after the Australian issuer returned to euros for its second senior deal of the year.

Luminor Bank was more than 3-1/2 times subscribed on its return to the euro market on Wednesday, allowing it to demonstrate a year-on-year improvement in its senior funding costs.

The People’s Republic of China returned to the European market on Wednesday, part of its plan to make euro bond outings an annual exercise. The €4bn transaction was a blow-out, with the order book well oversubscribed — and one of the three tranches achieving the sovereign’s first negative yield. Morgan Davis reports.

The People’s Republic of China is planning a comeback to the euro bond market this week, one month after selling its first dollar trade in the US.

KfW finished off this year’s funding programme with a €2bn green bond tap on Thursday, bringing the outstanding to €6bn and making it the largest ever non-sovereign green bond line.

Société de Financement Local (SFIL) was over 5-1/2 times covered as it brought its long-awaited debut green bond to the market on Friday, allowing it to price well inside fair value.

French bank Société Générale made a triumphant return to the dollar market this week, with its first additional tier one (AT1) capital issue in the currency for more than two years.

Financial institutions jumped into action this week, as positive news on the development of a Covid-19 vaccine led to superlative funding conditions in the euro market.

The euro SSA market was dominated by French issuers this week, with borrowers working swiftly to finish off their enlarged 2020 funding programmes once the EU had cleared the decks.