Germany

A softer backdrop on Thursday was not enough to deter financial institutions from entering the euro market, with Deutsche Bank set to sell a new non-preferred senior bond and Finnish insurer Sampo welcoming plenty of demand for a tier two.

The primary euro public sector bond market continued its busy week on Thursday with KfW and KommuneKredit issuing new 10 and 20 year deals, respectively.

After KfW mandated banks on Wednesday to join the 10 year euro flurry, the question on the minds of market participants is at what level the Germany agency will choose to start at with such a wide differential between relative and fair value.

The State of North Rhine-Westphalia and Nederlandse Waterschapsbank rebooted the long of the euro SSA curve on Wednesday with well subscribed deals and minimal new issue premiums.

German equity capital markets are set for a strong finish to the year as German companies use the momentum of the DAX to raise capital to finance growth or fund restructuring efforts during the pandemic.

The State of North Rhine-Westphalia and Nederlandse Waterschapsbank will be the first two public sector borrowers to test investors’ appetite for euro deals in the long end of the curve following the summer break.

The State of Baden-Wuerttemberg only managed to sell around half of its €1bn 10 year bond to investors on Tuesday as it came flat or slightly through its curve alongside competing supply in the tenor.

Doubts about the strength of covered bond investor demand were swept away on Tuesday after Berlin Hyp issued its most oversubscribed Pfandbrief in more than five years. The deal sends a strong signal to other issuers that may have been considering tapping the long end at negative yields.

The European Investment Bank will re-open the euro public sector bond new issue market for the last funding period of the year. Further issuers are expected to appear this week, trying to get in before the European Union’s giant borrowing programme begins.

Berlin Hyp has mandated leads for the first covered bond from the eurozone since June 30 and plans to issue a 10 year deal secured on green mortgages and has pledged to undertake a number of new strategic commitments.

Germany will issue green Bunds every year in the future, hoping to “establish a green euro interest rate benchmark, thus creating added value for the sustainable finance market”, its government said on Monday, as it revealed details of its first two green bond issues.

TAG Immobilien, one of Germany’s largest residential landlords, has issued a new €470m six-year convertible bond, tapping into heightened investor interest in German housing companies during the pandemic.