Germany

The Federal State of Brandenburg mandated banks on Monday for its second ever euro benchmark in the 20 year part of the curve, following its debut in the maturity in 2016.

Secondary spreads in the euro public sector market have widened heavily across the curve with just over a month to go before the European Central Bank is expected to put an end to its Public Sector Purchase Programme. SSAs are also being affected by the political ructions from Italy, Brexit and the global trade war, said bankers.

Deutsche Bank said on Monday it was looking to buy back €1bn of its non-preferred senior bonds from investors, in an effort to redeploy some of the ‘excess liquidity’ the bank has been running over its minimum requirement for own funds and eligible liabilities (MREL).

Issuer rating: A3/A-/BBB+

It is sometimes said that bondholders are treated like second class citizens at the expense of equity holders. But this week equity holders in Volkswagen should be knocking on its treasurer’s door, asking how investors in the latest bond deal were able to command such a premium for buying new debt.

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.