Euro
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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.
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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.
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The Republic of Indonesia sealed an opportunistic dual-currency bond on Tuesday, quickly taking advantage of positive sentiment following a ratings upgrade from Moody’s.
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Investors who can buy investment grade corporate bonds in a variety of currencies have been making the most of the relative value of dollar assets in recent years. However, the cost of hedging those assets has been steadily rising and is now at a point where such assets are looking much less attractive for non-US investors.
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Opinion is shifting as to whether the European Central Bank will end quantitative easing this year, with poorer economic data perhaps forcing the rate setter’s hand into extending the programme.
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KfW is set to follow a trio of euro trades in the seven year part of the euro curve last week with an April 2025 benchmark of its own, after mandating banks on Tuesday. Strong conditions mean the deal should receive a warm welcome, said bankers.
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Japanese telecoms group Softbank opened the week in the European high yield market with a multi-billion refinancing deal to redeem its old 2013 bonds — and delete a covenant that could get in the way of its flotation.
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German residential property company Grand City Properties brought its third corporate bond deal of 2018 to the market on Tuesday, while the return of seed company Syngenta with a jumbo multi-tranche deal neared.
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French shopping centre operator Unibail-Rodamco said in December it planned to sell around €2bn of bonds to refinance the bridge loan it has taken on to fund its $15.7bn acquisition of its Australian peer Westfield Corp. On Monday, it brought the deal to market and received reassuring demand.
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German building materials company HeidelbergCement sold its first trade of 2018, replicating its last deal of 2017. It also priced the new deal at a spread close to that it paid in 2017.
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