Germany
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Not only security but financial stability is at stake in the race to rearm -
◆ Backlog of German issuers looking to print ◆ State set to print while reforms put to vote ◆ Lower Saxony covers deal well
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◆ Rare 15 year trade part of multi-tranche deal ◆ Sluggish start to the day ends with €7bn final book ◆ Single digit new issue concession across all tranches
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Sparkasse Dortmund adds 10 year sub-benchmark offering to pipeline
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Separate listing planned for September
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Issuer expects second deal of same maturity in the autumn, while funding needs may change
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The project is now in build stage
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◆ Deal highlights Länder spread journey ◆ No price tightening ◆ Priced off KfW with minimal NIP
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Core SSA spreads suffer as EU-level funding expected to jump, but concerns also loom over Bunds and other govvies
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Issuer makes saving versus home currency and discovers ‘extraordinary’ real money demand
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Exceptional moves in rates could impact relative value across the FIG capital structure
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◆ German state braves extreme spread volatility ◆ Deal was priced after government signalled higher Bund and Länder supply ◆ ‘Flip side for investors’ is much higher yield
