Germany

Siemens has begun the IPO process for the highly anticipated spin-off of its health division, Siemens Healthineers, by releasing its intention to float document.

Berlin Hyp is expected to extend its covered bond curve and open order books for an eight year mortgage-backed Pfandbrief early next week, after mandating joint leads on Friday.

Deutsche Bank found fleeting funding consolation with a tightly priced Pfandbrief this week but, with a considerable funding requirement left to fill, the German bank is braced for a return to senior and subordinated markets where support is likely to be more flighty. Bill Thornhill reports.

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The State of North Rhine-Westphalia showed that the euro long end is open for core SSAs despite wider market volatility on Thursday, but there was a more testing time for Greece in secondary.

A report published on Friday and commissioned by the Capital Markets Union (CMU) locates countries that are well placed to match the domestic success of the French euro private placement (PP) and German Schuldschein instruments.

A jump in US Treasury yields following a higher than expected US inflation print could boost long end dollar supply from SSAs said bankers, although investors might be keen for concerns over inflation to die down first. Meanwhile, issuers have been focusing on short dated arbitrage style trades with benchmark issuance limited this week — and likely next week — due to the Chinese New Year holidays.

The State of North Rhine-Westphalia on Thursday brought the first 20 year euro benchmark of the year from a core eurozone issuer, for which leads said the “stars aligned”. A sell-off in rates, core SSAs stability in the face of wider market volatility and a healthy spread over OATs all helped the deal, they said.

German car rental and leasing company Sixt sold just the second corporate bond issue of the week when it copied the format of its four previous deals, which the company has sold at two year intervals.

The euro private placement market is seeing volumes rise to the highs reached in 2013-2015 as corporates push ahead with funding in the hope of beating European Central Bank interest rate rises expected later this year.

Investor expectations for the number of US Federal Reserve target rate rises this year grew on Wednesday after inflation figures for the country came in higher than most analysts’ expectations. The shift came on the same day that Rentenbank doubled its minimum size on a dollar syndication.

Deutsche Bank avoided senior unsecured and subordinated bond markets, where its paper has widened considerably, to raise €500m of seven year covered bond funding on Wednesday. The bank paid virtually no new issue premium.