German Sovereign

The sterling SSA market snapped back into life with a flurry of new deals after a quiet few weeks — although bankers lamented that the issuance door may have closed just as quickly as it opened.

The potential end of eurozone quantitative easing may be leading to sleepless nights for some, but top tier SSAs are welcoming the slow return to historically normal rates. KfW this week sold its first five year euro benchmark with a positive yield in nearly three years, welcoming back investors that had gone elsewhere in search of return — and auguring well for future euro issuance from the sector.

KfW built a towering book in the five year part of the euro curve on Wednesday with a deal that SSA bankers away from the trade said probably attracted heavy French demand. The agency’s choice of printing just €4bn from a book of over €8bn should ensure a tightening of its curve, they added.

The German State of North-Rhine Westphalia came to market this week with its fourth sustainability bond. The bond is the issuer’s largest ever, narrowly outstripping several €2bn bonds at €2.025bn.

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The Province of Alberta printed a strong 10 year dollar benchmark on Thursday — the first in that maturity from an SSA since late January — leading the way for others to follow, said SSA bankers. Elsewhere, five years was very much in vogue in the dollar market — although there were some signs of investor fatigue by the end of the week, despite more issuers being expected to look at the tenor next week.

The Province of Alberta printed a strong 10 year dollar benchmark on Thursday — the first from an SSA since late January — leading the way for others to follow, said SSA bankers. Elsewhere, Export Development Canada was unable to move from price thoughts on a five year global.

Swedish Export Credit Corporation on Wednesday priced what bankers away from the deal said was a “very strong trade”, as it printed in the same five year tenor that has brought success for SSAs over the last few weeks. But one borrower is set to attempt a tenor that has not been visited since late January.

SSA borrowers are piling up in dollars. Swedish Export Credit Corporation (SEK) will bring a five year benchmark on Wednesday, coming on the heels of Oesterreichische Kontrollbank’s (OeKB) own deal in the tenor on Tuedsay.

The State of North Rhine Westphalia broke its size record with a sustainability bond on Tuesday, printing €2.025bn and cutting 2bp from guidance to offer a skinny new issue premium.

The SRI market is in full swing. Two borrowers are set to come to market on Tuesday, while a third is going on the road to promote its return to the format.

Sunday's Italian election is looming in the minds of those in the European SSA market. But despite the political risk posed, there is next to no volatility in evidence.