Euro

A pair of supranationals helped bolster Hong Kong’s green bond ambitions with some SRI deals this week.

KfW drew its largest ever benchmark book this week while visiting the seven year tenor, a part of the euro curve that has been red hot for issuers for several weeks and that SSA bankers still has plenty to offer borrowers next week. The European Financial Stability Facility (EFSF) is lining up a deal for next week, although bankers are suggesting it looks at the long end.

Public sector bankers lined up to laud a new SSA borrower this week, as the International Development Association (IDA) surpassed expectations on its bond debut. Now, many are eager to see the its next move, with many anticipating a Washington supranational with greater currency flexibility, writes Craig McGlashan.

After selling €4.6bn of loans in March, Unilever Spreads unveiled the €1bn high yield bond portion of its leveraged buyout funding package on Wednesday. But as well as jumbo deals, other borrowers with smaller offerings are also vying for investor attention.

French telecoms company Iliad is becoming a frequent borrower in the corporate bond market. Two deals in six years have been followed by two deals in seven months. The company’s latest deal, a dual tranche offering, was its largest to date, but order books were barely 1.5 times oversubscribed.

A four week wait for a new corporate hybrid deal came to an end this week with $2.3bn of supply. The levels of oversubscription, however, showed that plenty of demand still remains as investors clamour for the enhanced yields on offer compared to senior debt.

A trio of Australian issuers had a mixed response to their corporate bond issuance this week. Sydney Airport was priced with no new issue premium, but compatriot Stockland found itself paying a 20bp premium two days later.

Australian property company Stockland was the first Australian issuer to sell a green bond in Europe in 2014. The company finally returned to the euro market on Thursday, but chose not to go with a green bond, on the same day as compatriot Ausgrid chose to price its new deal.

EPIF Infrastructure, has released initial price guidance for a six year fixed rate euro benchmark.

KfW took home €5bn in the seven year part of the euro curve, which has been red hot for a few weeks, with bankers citing low second quarter supply as particularly supportive of conditions and suggesting there is plenty more interest for further trades in the tenor. The European Financial Stability Facility is lining up a deal for next week — although bankers are suggesting it looks at the long end.

After several weeks of focusing on conventional bonds in core currencies, SSAs popped back into the socially responsible investments (SRI) market this week. Nederlandse Waterschapsbank (NWB) is laying the ground for an affordable housing bond in euros, while the European Investment Bank found a solid reception for a Climate Awareness Bond that came in rare seven year dollar form.

French telecoms company Iliad is becoming a frequent borrower in the corporate bond market. Two deals in six years have been followed by two deals in seven months. The company’s latest deal, a dual tranche offering, was its largest to date, but order books were barely 1.5 times oversubscribed.