French Sovereign

SNCF Réseau has hit screens for a 30 year bond to be sold this Friday. The borrower announced the mandate just after the completion of the European Central Bank's governing council meeting press conference on Thursday.

Representatives of eight central banks including those of France, China, Mexico and the UK are meeting in Paris this week for the first time, as part of a new initiative to share best practice on how to make the financial system greener.

Public sector borrowers wrapped up a trio of short end dollar trades on Tuesday, with the tightest issuer able to grind in pricing to the lowest level from an SSA this year and the higher yielding names finding ample demand despite ending up at similar spreads. SSA bankers are confident that the strong conditions will also ring true at the long end for KfW, which has mandated for its first 10 year dollar benchmark in nearly three years.

The European Financial Stability Facility (EFSF) has announced a dual tranche for its second trip to market for the year. The trade will come on the heels of a €1.4bn Agence Française de Développement (AFD) 10 year, which managed to cut 4bp from its spread between guidance and launch.

Spain, fresh from an upgrade to its Fitch credit rating, hit screens on Monday to announce a new 10 year euro benchmark. The sovereign will share the market with Agence Française de Développement (AFD).

Public sector borrowers are pouring into the three year part of the dollar curve after a series of issuers printed strong deals in the tenor last week.

Sterling conditions are searing hot for public sector borrowers, with records breaking left, right and centre. And despite investors taking large volumes out of the market, SSA bankers are confident that more supply can be handled.

The three year part of the dollar curve took centre stage for public sector issuers this week, having played second fiddle to fives so far this year. Issuers were met with just as strong a reception in the short end of the curve as they have enjoyed in fives so far — and SSA bankers believe some could be tempted to test the longer end.

Guarantor: Kingdom of Belgium (51.41%), Republic of France (45.59%) and Grand Duchy of Luxembourg (3.00%)

Dollar SSA deals are showing little signs of a hangover from a public holiday in the US on Monday, with all three of Wednesday’s trades well over subscribed and pricing inside guidance.

Big central bank and bank treasury demand, alongside good liquidity in the sterling/dollar cross currency basis swap and issuers’ willingness to print large deals, are driving the strongest ever start for the sterling SSA market — and a record trade for World Bank.

A widening in dollar swap spreads since the end of last week should help support a trio of dollar deals on screens for Wednesday’s business, said SSA bankers.