Germany
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CPPIB Capital and NRW.Bank brought well received 10 year euro green bonds on Monday, following the completion of their respective investor calls last week. Elsewhere, KfW has mandated for a euro benchmark in the five year part of the curve, having issued in the 10 year segment earlier in the month. -
BayernLB launched a 10 year Pfandbrief on Monday in line with where DZ Hyp’s recent 10 year was trading, setting the market up nicely for Aareal Bank, which has also announced issuance plans. Despite record supply last week, spreads are tighter across the board, possibly reflecting the view that volumes are set to slow as issuers head into blackout.
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The covered bond market remained in fine fettle on Friday as Eika Boligkreditt found strong demand for the seventh 10 year of the week and Helaba issued a benchmark-sized tap of an old 10 year. At the same time BayernLB picked leads for another 10 year and Cafill mandated for its first social covered bond.
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Guarantor: Financial Market Stabilisation Fund of the Federal Republic of Germany
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Sterling issuance from non-UK SSAs kept up its record start to the year this week, as UK bank treasuries are searching for safe places to put sterling, afraid the country will leave the EU without an exit deal.
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It was another sparkling week in dollars for public sector borrowers, with Asian Development Bank the pick of the bunch as it brought the tightest deal of the year so far versus Libor and US Treasuries. More supply is expected for next week, although some SSA bankers feel the market could do with a “breather”.
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Wider euro spreads versus swaps and Bunds had already led to some superstrong trades in the currency this year, but Spain outdid them all this week with the largest ever book for a public sector euro benchmark. Every other euro deal also attracted heavy oversubscription with minimal concession, paving the way for expected supply next week from a “large German agency in the short end” and a “central European sovereign in 10 years”, according to one head of SSA syndicate.
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Investors are returning to the covered bond, sovereign and supranational agency (SSA) markets in their droves. Despite exceptionally heavy issuance, the startling breadth and depth of demand seen in many deals this week caught market participants off guard — not least the investors themselves. Bill Thornhill reports.
