Euro

Galicia on Thursday made a triumphant return to the bond markets on Thursday as it became the latest Spanish autonomous community to print after several years away.

The Spanish Treasury is studying the possibility of issuing green bonds — a shift from its previous position on the format — after the country’s government last week outlined a series of measures to decarbonise the economy by 2050. Spain is also adjusting its inflation-linked bond issuance strategy this year.

Poland is in the market for its most ambitious green bonds yet. It has opened books for two tranches of euro debt, hitting the 10 and 30 year maturity buckets.

The Export-Import Bank of China raised €1bn from a three year bullet on Wednesday, bringing home more cash than expected thanks to overwhelming orders from eager investors.

Galicia is set to become the latest Spanish autonomous community to return to the bond markets after many years of absence, after it mandated banks on Wednesday to sell a new issue. It could also come to the market for a second time later in the year.

Export Development Canada made light work of its debut euro benchmark on Wednesday, with the deal heavily oversubscribed and printed 3bp tighter than price thoughts. While applauding the deal, some on-looking SSA bankers felt the level on offer might have been slightly generous — although they admitted that fair value is always fuzzy on an inaugural trade.

Asian investors this week took their largest slice of a European Stability Mechanism bond issue since 2014 — a sign that the region’s buy-side was treating the eurozone as a “safe haven”, according to a person close to the deal.

Export Development Canada mandated banks on Tuesday for its inaugural euro benchmark, despite the euro/dollar basis swap having moved against euro issuance since the start of year, according to bankers.

Spain's no-grow €5bn 15 year syndication on Tuesday was only marginally short of breaking the record order book for a public sector euro benchmark that the sovereign set only last month, despite some investors saying that the deal offered little or no concession.

The European Stability Mechanism on Monday took care of all its first quarter funding needs in one fell swoop, drawing a heavily oversubscribed book with high Asian demand that allowed 2bp of price tightening. On-looking SSA bankers said the deal was a good sign for — and likely gave confidence to — Spain, which is bringing its second syndicated benchmark of the year on Tuesday.

Rating: Ba2/BBB-/BBB-

The engine driving the SSA euro market has found a new gear as borrowers and investors turn their attention to the hitherto underserved long end of the curve. The overwhelming demand they received this week is likely to encourage more borrowers to follow.