German Sovereign
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Yields across asset classes plumbed ever lower depths this week but investors were still forced to participate in deals as cash floods into fixed income funds. Now market participants have questioned whether the coming round of likely rate cuts will reveal the limits of investor tolerance. Lewis McLellan, Burhan Khadbai and Bill Thornhill report. -
Austrian agency Asfinag won a big order book on Tuesday, allowing it to price 3bp tighter than guidance, in a 10 year tenor the issuer hasn't accessed since 2009. Municipality Finance and the German federal state of Lower Saxony will add to the euro SSA supply on Wednesday with a 10 year green bond and a seven year benchmark, respectively.
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KfW restarted the sterling SSA bond market on Monday, with the first public deal since early June. The German agency found good demand, allowing it to print a size above its minimum target.
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Rentenbank failed to achieve subscription for its €500m 10 year trade on Tuesday, despite offering a positive yield and a maturity that has been labelled the ‘sweet spot’ in the euro public sector bond market.
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A structure developed in the loan market, in which a company’s financing margin can be lowered during the life of the deal if it improves its environmental, social and governance credentials, has crossed over into the Schuldschein market. That raises the possibility it could make the leap to the bond market, write Silas Brown and Jon Hay.
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Bond market alpha types may find it galling when the fusty old loan market can teach them an innovative new structure. And yet, that may be about to happen.
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Three SSA borrowers issued a total of £200m ($255m) of medium-term notes in response to an inquiry for three year non-call one fixed rate sterling bonds on Tuesday — which probably all sold to the same buyer — amid an uptick of paper in the currency.
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KfW returned to the market on Wednesday for its second five year euro benchmark of the year. The €5bn 0% July 2024 note was issued with the lowest yield the German agency has ever paid.
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KfW returned to the market for its second five year euro benchmark of the year. The €5bn zero coupon note was issued with the lowest yield ever printed by the German issuer.
