France

Another slew of socially responsible SSA deals hit screens on Wednesday, all achieving impressive size and healthy order books, showing the strength of the market in euros for the borrower class.

My Money’s Bank’s 10 year Obligations Foncières issued on Wednesday attracted strong demand, largely due to the spread on offer.

Société du Grand Paris plans to steam ahead with funding as it announced a doubling of its green EMTN programme and a substantial increase to its 2020 funding programme to help prefund the financing for the next three years of the Grand Paris Express project.

At around €300bn, France is the world’s second largest covered bond market. Yet, unless issuers consider pre-funding for bonds that fall due early next year, supply prospects for the remainder of this year are dim. This, along with stability in the French economy, property market and covered bond ratings, should stand the asset class in good stead.

Yorkshire Building Society (YBS) has mandated leads for the first euro covered bond from the UK since January, My Money Bank has also mandated and, after concluding a roadshow, Sumitomo Mitsui Trust Bank is due this week too. All three bonds will offer a temptingly high spread.

Green, social and sustainable issuance has dominated the supranational and agency bond market for a whole month, consistently outpacing conventional supply. That trend looks set to continue with three SRI deals already on screens.

Now that SSAs are back to pricing at the spreads they offered before coronavirus hit, central bank investors are pushing back and reducing their orders.

Rating: Aa2/—/AA

Public sector debt market participants are still on tenterhooks, awaiting the arrival of the EU’s now much delayed funding programme. Many of the sector’s top borrowers have all but cleared their decks in preparation, but some are still grappling with inflated borrowing requirements as a result of the coronavirus pandemic. Lewis McLellan reports.

Bank Nederlandse Gementeen kicked off a busy week for socially responsible bond issuance by public sector borrowers with a well-received 12 year sustainable bond, its longest ever deal in that format.

BNP Paribas showed that structural creativity can achieve results in equity capital markets with a €462m block trade in Alstom stock on Tuesday evening. The bank used a forward sale structure to allow Bouygues to financially sell a 4.85% stake in Alstom now, but legally retain the shares until the end of next month so it can vote in favour of an acquisition.

French agency Caisse d'Amortissement de la Dette Sociale returned to the euro social bond market on Tuesday, equalling its impressive achievement earlier this month to print another €5bn deal.