German Sovereign
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The scores are in. The BondMarker voters have delivered their verdict on Greece's long-awaited return to capital markets and on FMS Wertmanagement's five year dollar benchmark. -
Public sector issuers are taking advantage of strong summer conditions in the dollar market to bring green and arbitrage-style deals, with more issuance expected next week.
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The dollar market is grinding on throughout the summer, with public sector borrowers pushing out deals at the short end, although none have been in benchmark size this week. Two issuers launched transactions on Tuesday with a third slated to follow on Wednesday.
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Guarantor: Financial Market Stabilisation Fund of the Federal Republic of Germany
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FMS Wertmanagement was this week the latest public sector issuer to enjoy enviable conditions in the dollar market, and after a US Federal Reserve meeting this week passed without any major surprises more borrowers are rumoured to be looking at trades for next week.
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NRW.Bank announced on Wednesday that it will go on the road at the end of August to market its fifth green bond.
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FMS Wertmanagement nipped into a quiet dollar market on Tuesday, pricing a five year global benchmark flat to its curve after taking the unusual step of jumping 2bp from opening guidance in one step.
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FMS Wertmanagement came shooting out the blocks on Monday with an early mandate for a global benchmark. The issuer has opted for a five year, with banks on the trade citing strong investor appetite for dollar paper at that point of the curve.
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Public sector issuers are enjoying a rare time in dollars, with a lack of supply and strong demand allowing tightly priced short end deals — leading one syndicate official to respond to a question on pricing concessions with: “New issue what?” But hopes of longer end issuance appear dashed as US yields fall as quickly as expectations that US president Donald Trump will deliver on his pro-growth policies.
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KfW printed a €1bn tap of a July 2022 line on Wednesday, sneaking in a deal ahead of the European Central Bank meeting on Thursday.
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Sweden on Tuesday printed a dollar benchmark at one of the tightest spreads to mid-swaps from a public sector issuer this year, as a Canadian province prepared to bring a deal in the currency further out the curve.
