Germany

Deutsche Hypo has mandated lead managers for a Pfandbrief deal, choosing the same seven year maturity that Berlin Hyp opted for on Monday.

Guarantor: Federal Republic of Germany

The Schuldschein market is having a quiet, Germany-focused start to the year. But Schuldschein agents are confident investor demand remains as strong as ever.

Three SSA issuers brought dollar deals to market on Wednesday, hitting screens in a variety of formats and tenors, making the most of excellent conditions to pull off impressive deals. A fourth is lined up for Thursday.

Santander Consumer Finance in Germany attracted excessive demand for its debut benchmark Pfandbrief which offered a considerable pick-up over swap rates. However, demand was more tentative for La Banque Postale’s 15 year, possibly due to renewed volatility in rates.

Finland received record demand for its first syndication of the year on Tuesday. The sovereign was joined in the long end of the curve by the State of North Rhine Westphalia as it tapped its February 2038s.

The Republic of Finland and the State of North Rhine Westphalia hired banks on Monday to prepare syndicated bonds at the long end of the euro curve. Yields of eurozone haven assets remain compressed while fears of the coronavirus outbreak intensify.

Volkswagen Bank has belatedly joined the list of banks whose Pillar 2 requirements were posted on the European Central Bank's website this week. It had initially not consented to its targets being published.

Korean Housing Finance Corporation (KHFC) issued its first €1bn-sized covered bond and first negative yielding Asian covered bond on Wednesday. The strong reception was in keeping with two German Pfandbriefe also issued this week by Deutsche Apotheker- und Ärztebank (Dapo) and Sparkasse Pforzheim Calw.

Few MTN issuers have so far issued in the Libor-replacing euro short term rate (€STR) format, with deals limited so far to supranationals, agencies and, this week, a sub-sovereign. Some bankers blame the 2017 EU Prospectus Directive for tightening up the rules on adding new indices to programmes, leaving non-exempt issuers on the sidelines.

The Loan Market Association is set to restart its Schuldschein working group in February, with a workstream addressing credit restructuring. This is an early sign that the market’s heavyweights are taking this issue — which has damaged the Schuldschein’s reputation in some quarters — seriously.

Deutsche Apotheker- und Aerztebank (Dapo) underlined just how strong the primary covered bond market is on Thursday by wrapping up a busy week's supply with what was arguably the tightest German deal of the year so far.