Europe
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Guarantor: Kingdom of Belgium (51.41%), Republic of France (45.59%) and Grand Duchy of Luxembourg (3.00%)
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With issuers already lining up €6bn of new deals in January, leveraged loan bankers are confident that the European market is set for another booming year in 2018. -
Expectations that Sweden will issue a sovereign green bond have risen, as a government inquiry this week recommended the idea.
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SSAs enjoyed a fine week in the sterling market, raising a total of nearly £2bn as bankers pointed to several factors that could be driving demand.
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The euro market has, after a wobble in the first week, adjusted admirably to a new price level and got off to a spectacular start, providing record book sizes and smooth executions across the curve.
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Public sector borrowers are finding funding conditions beyond their wildest dreams, with not just last year’s staples of dollars, euros, sterling and Australian dollars on offer across the curve but the Canadian and New Zealand currencies coming into play too.
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Italy and Portugal showed this week that any concerns about the pace of eurozone quantitative easing halving to €30bn from January were overdone as they each built their largest ever benchmark books. Italy’s trade was particularly notable, as it was the last syndication by its retiring head of funding — and market stalwart — Maria Cannata.
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Crédit Agricole SFH and Caffil issued eight year covered bonds this week and managed to attract strong demand from bank investors buying for their liquidity portfolios.
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A trio of 10 year covered bond deals issued this week showed that interest in this tenor is less uncertain than initially feared. But, in a rising yield environment, investors are likely to become more defensive and this demand risks being short-lived.
