Germany

Bemusement is growing among Schuldschein lenders, as a seventh issuance platform — again created to promote efficiency — is set to be launched.

After Volkswagen (VW) printed the biggest corporate bond trade in its history the previous week, Volkswagen International Finance sold a six tranche dual-currency deal on Monday. While pricing on the dollar clips was commended by market participants, there were fewer compliments about the euro tranches, writes Nigel Owen.

Building materials company Knauf has signed a €4bn-equivalent underwritten debt package to go towards its purchase of US peer USG Corp, as lenders continue to reap the rewards of Germany’s booming M&A market.

NordLB will launch a Schuldschein issuance platform alongside a fintech firm on Wednesday, according to many Schuldschein participants.

A Deutsche Pfandbriefbank three year Reg S dollar benchmark may have been meagrely oversubscribed on Tuesday but, at $600m, it was just large enough to make it over the size threshold required to meet the top liquidity coverage ratio category — to the benefit of certain investors.

UniCredit’s German subsidiary, HVB, did well to issue a €750m seven year Pfandbrief on Tuesday, but with Italian headline risk flaring up again, it may have paid slightly over the odds.

UniCredit’s German subsidiary, HVB, has announced plans to issue a seven year euro benchmark Pfandbrief, its first covered bond in over a year. At the same time Deutsche Pfandbriefbank (PBB) plans to issue a dollar benchmark three year Pfandbrief.

After Volkswagen printed the biggest trade in its history the previous week, the company’s International Finance arm sold a six tranche dual-currency deal on Monday. In total, the company raised more than €14bn equivalent in a week.

Holders of HSH Nordbank’s tier one securities have reacted angrily to the German bank’s announcement that it expects to write the instruments down further. Bondholders are also meeting later this month to vote on taking legal action against the bank.

Guarantor: Federal Republic of Germany

After a year during which euro issuance from SSAs has far outstripped that in dollars, thanks to the vagaries of the euro/dollar basis swap, a German agency was able to nip in to a funding week shortened by US elections and central bank meetings to score a strong result with its sole dollar benchmark of the year.

The European Financial Stability Facility finished off its 2018 issuance this week with what was likely the last jumbo euro benchmark of the year. The deal was solid, but SSA bankers warned the euro market feels “tired”.