Euro

The ripple effect of a 17bp rise in the 10 year US Treasury yield helped new corporate bond deals perform in the secondary market last week, despite other financial markets suffering losses. Those higher yields and an expected slower pace of issuance are expected to keep conditions positive for issuers who approach the market.

Romania was able to cut the spreads on both tranches of its euro benchmark on Thursday.

Caisse des Dépôts et Consignatios has reduced its 2018 funding target by 10%, but may not even return to the market for further issuance this year, according to a senior funding official at the agency.

A spike in US Treasury yields on Thursday had a knock-on effect on bond spreads in Asia, posing an additional challenge for issuers ready to head out the gates next week.

Italian government bonds suffered another up and down week as investors first baulked at government plans for the budget deficit to be 2.4% of GDP in each of the next three years — then snapped up paper amid suggestions that the deficit would fall gradually. In any case, many on the buy-side are wary of any policy announcements that come from the government.

Rating: A1/A

The Development Bank of Japan was able to tighten pricing on a €700m October 2025 sustainability bond this week, something not every issuer has found possible in the currency in the past few weeks. Meanwhile, the World Bank tapped an old friend for $200m with a green bond.

Two Nordic agencies have raised their funding needs for the year due to an increase in their lending activity, just as the final quarter has begun.

The European Stability Mechanism is likely to aim for the six to eight year part of the euro curve when it brings its first deal of the fourth quarter next week, said SSA bankers. The trade will likely face a more cautious investor base than the borrower enjoyed earlier in the year, they added.

Rating: B1/B+

American real estate investment trust (REIT) WP Carey paid a significant premium when it sold its second euro deal of 2018 on Tuesday. Despite the lack of reverse Yankee issuance this year, investors needed some persuading to buy the 7.5 year deal.

Romania hit screens on Thursday morning for its second dual tranche euro benchmark of the year.