Germany
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After a slow start to the week, a torrent of covered bonds was priced on Wednesday and Thursday, as issuers sought to move quickly in case the market succumbs to one of many potential political risks it faces this month.
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The German and Spanish issuers provided the main focus in the FIG market on Thursday, respectively pricing a €500m 10 year and a €1bn eight year, which were both easily sold.
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Deutsche Kreditbank enjoyed a healthy reception for its debut in the senior market on Wednesday, with its choice of green funding a clear match for its operations. -
KfW became the first supranational or agency to sell a euro-denominated five year benchmark with a negative yield on Tuesday.
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WL Bank was unable to sell a €250m nine year deal on Monday. Despite the fact it offered nearly 40bp over Bunds and a modest premium against its own curve, rival bankers described it as “stupidly expensive.”
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In this round-up, the Shanghai-Hong Kong Stock Connect see steady volumes on its southbound channel, the Sino-German exchange in Frankfurt marks its first six months and HKEX offers new details on its expanded RMB futures. Plus, a recap of GlobalRMB’s top stories this week.
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A pair of issuers reopened the 10 year part of the dollar curve for sovereigns, supranationals and agencies this week, but despite both trades gaining plaudits there is still scepticism over whether a $2bn-plus sized deal is possible.
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Bayer and Monsanto are circling each other as they both seek acceptable terms for a merger that would create a world leader in crop science. For the equity capital markets, the deal holds out the possibility of one of the world’s largest ever rights issues.
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Agro-chemical giant Monsanto this week rejected a first, $62bn takeover approach from Bayer but with both companies open to a deal, banks, led by Bank of America Merrill Lynch and Credit Suisse, are preparing for the huge financing package expected.
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Rentenbank joined the rush for dollars on Wednesday as Inter-American Development Bank and British Columbia set pricing on deals announced the previous day.
