Germany

Issuance is starting to resume after the summer break; however, this week a booming public market drew away investor and issuer attention from MTNs. Despite this, a range of established SSA, FIG and corporate borrowers have slipped in, with deals across core, niche and EM currencies.

After two huge days of corporate bond issuance, Thursday was much quieter, with issues only from Vier Gas Transport and SBB Norden — not because the market was worse, but just because most of the issuers that wanted to come this week had crowded into the first two days.

A pair of European agencies placed taps at the long end of the Kangaroo curve this week, printing at the nine and 12 year points. Yields on these notes have fallen compared to previous taps, as the Kangaroo market feels the effects of a global bond rally.

Some traditional arrangers of Schuldscheine, which see themselves as the guardians of the market’s probity, were horrified by the news that Pareto Securities is looking to set up shop on their front lawn. But the sort of companies Pareto is likely to bring will answer the prayers of some investors that the old guard have not. And with it, buyers will have to take greater responsibility for what they stick on their books.

Guarantor: Federal Republic of Germany

Deutsche Pfandbriefbank was marketing a five year senior preferred bond in the euro market on Thursday. The deal was launched at a spread unmoved from price thoughts, with order books only €125m larger than the deal size.

Subway operator Tianjin Rail Transit Group has raised a €200m Schuldschein loan, becoming the first Chinese company to tap this market. Bankers believe similar deals will follow, given the market’s appeal.

Demand for the Republic of Finland’s latest bond was high on Wednesday as it printed through the ECB deposit rate to sell “the most expensive syndication of all time”, according to a banker on the deal. The five year note came 29.9bp richer than Austria’s previous record holding deal, another five year note sold in June.

TeamViewer was the first European issuer to test the IPO market after the summer lull on Tuesday. Sources close to the deal hope that the German software company’s high growth business model will allow it to sail through tricky markets.

VC Trade, one of the leading digital platforms in the Schuldschein market, has introduced an e-signature into its syndication process, which its founders claim renders the syndication process totally paperless. An impediment to paperless transactions has been market participants’ fear of regulatory and legal consequences — but VC Trade believes it has managed to navigate a way over these hurdles.

The Association of German Pfandbrief Banks (VDP) has introduced minimum standards for issuing green Pfandbriefe, a development that should help seal Germany’s position as a leading jurisdiction for green covered bond issuance.

Berlin Hyp, the German mortgage bank, this week set a new record with the most negative yielding covered bond, a transaction that should bolster the confidence of other borrowers who can no longer put off issuing such deals.