Germany

The covered bond market is likely to remain equally busy on Friday as it was on Thursday with a further three deals mandated. Bankers say next week could become even more frenetic.

Schuldschein players are not expecting much deal flow this week but most are optimistic that the market is in a better shape than others. A busier first quarter is expected as a consequence.

LBBW decided against competing for investors' attention with Commerzbank on Wednesday and has opted to give investors time before opening order books for its first covered bond of the year on Thursday.

Commerzbank reopened the covered bond market with the first covered bond of the year and the first in more than a month. The generously priced two part transaction was slow to start, but in the context of a weak and volatile market backdrop, the size was impressive.

Commerzbank and LBBW are looking to become one of the first issuers in the euro market in 2019, having both announced new mandates for covered bonds on Friday.

Conditions have rarely been sweeter for European borrowers seeking to diversify their funding sources. Europe’s dominant private debt markets for investment grade issuers, the US private placement market and the Schuldschein, are thriving, and agents in both are on the hunt for new borrowers. Their search will better if, as expected, public bond markets have a tough 2019. Silas Brown reports.

Germany has increased its funding target next year to the highest level since 2014 in order to partially refinance maturing debt from its winding-up agency, FMS Wertmanagement, for the first time, the sovereign announced on Tuesday.

Chemical and consumer goods firm Henkel has signed a €1.5bn sustainability-linked revolving credit facility, with leads claiming the deal is the first of its kind in Germany.

A revolution is occurring in the Schuldschein market. This sedate and sober instrument has shaken its fusty reputation and transformed into a bustling hotbed of technological progress. Seven digital platforms sprang up in 2018, each declaring a grand ambition to drive efficiency. But with platforms jockeying for position, under the eye of the German regulator, some question the rate of change and the authenticity of some agents of it.

China has rolled out trade concessions to the United States, signalling a willingness to negotiate before the trade war gets out of control. But it has also increased its rhetoric over the arrest of Huawei’s chief financial officer in Canada.

KfW will look to begin its benchmark funding earlier than normal in the new year, amid expected volatile market conditions.

KfW has ramped up its funding volume for next year to its highest level since 2011, the agency said on Tuesday.