Germany

Public sector borrowers are having to take a more cautious approach to their dollar issuance, as wide swap spreads and a disconnect between secondaries and primary clearing levels require a touch more concession. But while all agree on the treatment, there are differing views on how long the affliction will last, writes Craig McGlashan.

Guarantor: Federal Republic of Germany

Les Cinémas Gaumont Pathé, a subsidiary of Pathé Group, has issued an inaugural Euro PP transaction in what is a large size for the busy market.

UK transport operator FirstGroup has raised dollar funding in the US private placement market in a bid to refinance sterling bonds expiring in September. According to one agent, the transaction was twice subscribed despite 15 other borrowers also being in the market.

KfW was set to price a $4bn three year global at the tight end of guidance with a comfortably oversubscribed book on Tuesday. But bankers said the concession offered was a sign of a changing pricing dynamic between issuers and investors.

This week is a tale of two IPOs and how sellers react to the market volatility. One seller has decided to pull a deal that no longer made financial sense, while another has chosen to resize its IPO to get it done.

A single SSA benchmark is all bankers expect to emerge this week, as the market hunkers down to await the second quarter.

The pipeline of high yield deals from German real estate borrowers is finally building up after more than two years of work with underwriters and lawyers. A new €300m bond from Corestate should pave the way for more players to shift their funding from bank loans to bonds, said market participants.

Deutsche Börse has said it will build a blockchain-based securities lending platform that will be open to all custodians.

New technologies are marching into the securities issuance process. This week came bids to shake up two very different kinds of private debt — traditional corporate Schuldscheine and funky structured notes.

Watford Community Housing has raised £200m from a mixture of loan facilities and private debt. Housing association transactions have been “keeping PP agents busy” in a quieter month in the sterling private placement market.

French institutional investors, who dominate the Euro private placement market, are expecting a rise in issuance soon after the European Central Bank withdraws from buying corporate bonds. They expect their pitch to issuers will be that much sweeter as yields in the bond and Schuldschein markets rise.