Germany

Issuers in the financial institutions bond market do not want to see the chance for cheap funding slip, so more are lining up deals. On Monday, Landesbank Hessen-Thüringen (Helaba) mandated leads for a preferred senior bond in euros, and UK insurer Utmost International said it was aiming for an senior unsecured bond in sterling.

KfW’s inclusion of ESG ratings in a term sheet might seem a superficial step — just one more disclosure of another piece of publicly available data — but it is a step towards a more sensible system of socially responsible investment.

KfW made a simple but potentially significant step in the evolution of bond markets this week as it became the first borrower to highlight its environmental, social and governance (ESG) ratings in term sheets for a bond issue, from the mandate announcement to the final pricing details. SSA bankers and issuers have applauded the move and other public sector borrowers are looking to follow, writes Burhan Khadbai.

Guarantor: Federal Republic of Germany

UniCredit’s has chalked up its best quarterly numbers in a decade, its CEO said on Thursday, with the performance of the investment bank lifted by soaring trading revenues. The Italian lender claimed victory on its ‘Transform 2019’ plan, ahead of the launch of a new business strategy early next month.

Gewobag, the A2/A+ rated German housing company, has launched the first Schuldschein with Euribor floor set below zero, just months after placing €700m of Schuldscheine into the market.

In an illustration of the spread tightening under way in covered bonds, Deutsche Apotheker-und Aerztebank (Dapo) priced a 10 year inside its curve this week. At the same time Raiffeisenlandesbank Vorarlberg followed DZ Bank into the 15 year tenor to give a tempting reoffer yield of almost 50bp.

Hamburg Commercial Bank is offering to buy back up to €1bn of its Pfandbrief notes, as the newly privatised German lender seeks to reduce its assets and liabilities in line with one another.

Another Germany-focused real estate firm is dipping into the high yield bond market. Peach Property is launching €250m of unsecured senior notes, following a successful bond issue by Demire. While Germany is on the brink of recession, its property market keeps breaking new records.

KfW returned to the euro market on Tuesday for a tap of its euro May 2027 green bond. The deal offered a small new issue concession at the final spread, as the euro SSA pipeline winds down in the final months of the year.

Caffil issued the tightest French 10 year of 2019 amid a flurry of other well received covered bonds issued on Tuesday by DZ Hyp, mBank and Santander UK. While the European Central Bank’s return to the market helped deals go well, it was not needed amid an improvement in risk appetite.

Large Schuldscheine are being lined up for the first quarter of next year, arrangers said, with investors reaching their lending limits for the year. But there are still deals numbering in the double digits to be done by Christmas.