Germany

Deutsche Pfandbriefbank is lining up to issue its first additional tier one bond, which would give primary market investors their first chance to gain AT1 exposure to a German bank in close to three years.

Euro PP market players are growing confident that widening spreads and growing volatility in the unrated and high yield public bond markets will drive an increase in the average deal size in their market in the coming six months.

Sterling seemed to be the only game in town this week. Two SSA issuers printed in the currency on Wednesday, taking advantage of a favourable basis swap.

Schuldschein market participants expect an uninspiring pipeline for the next few months as the hangover of 2017's pre-funding spree is felt in the first half of this year. But traditional arrangers hope the itch to win mandates is satisfied by a search for borrowers from new regions, and not a scurry down the credit spectrum.

Private placement investors have noted a widening in secondary market spreads for the bonds of UK utilities. That means they may be able to price private placements for these borrowers within their outstanding sterling bond curves, depending on maturity, which has not been easy in the last few years.

The Schuldschein market's first quarter of the year did not exceed its participants' wildest dreams. German speaking borrowers have maintained a healthy deal flow, but landmark deals from exotic locations have been lacking, leaving arrangers frustrated.

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.