Germany

HVB, the Germany subsidiary of UniCredit, attracted more demand for its €750m 10 year than any Pfandbrief of that size launched in over a decade.

Four public sector borrowers announced new deals in the primary market on Monday ahead of the European Union’s much anticipated second transaction from its Support to mitigate Unemployment Risks in an Emergency programme this year, which is expected to arrive later in the week.

UniCredit’s German subsidiary, HVB, is expected to open order books for a 10 year benchmark on Tuesday. With swap yields currently just positive, the deal has a slim chance of offering a positive return.

European banks have been busy in the credit markets in 2021, despite fears that rising deposits and cheap central bank money would eat away at issuance volumes. Sales have been boosted by a sharper focus on senior debt and a pivot towards dollar transactions.

The European Commission has opened a public consultation as part of its review of the EU’s crisis management framework, as market participants call for more urgent political progress on key areas.

The rise in US Treasury yields has begun to sour. While at first it was hailed as an indication that investors were anticipating rapid economic recovery and stimulus-borne inflation, it seems now to have outstripped inflation expectations. The sell-off shows little sign of slowing, and if the volatility does not abate, primary markets could begin to suffer.

Guarantor: Federal Republic of Germany

Schuldschein agents have begun offering borrowers delayed draws in a bid to increase the product's value as a funding option. Many investors are wary of the prospect of deferred funding but are also desperate for supply.

Two top tier SSA borrowers hit opposite ends of the curve on Wednesday. Asian Development Bank launched a trade at the 10 year tenor, braving a sharp sell-off in US Treasuries. KfW appeared at the short end of the curve where only a handful of borrowers have printed this year.

Vantage Towers, the telecoms towers unit of Vodafone, has launched its long-awaited flotation on the Frankfurt Stock Exchange, having announced its intention to float on Wednesday.

The State of Baden-Württemberg will be holding investor calls this week to introduce its new green bond framework ahead of a debut deal in the format.

Listed real estate firm CPI Property is repaying a portion of its Schuldschein early at par, taking advantage of favourable legal conditions in Germany regarding early prepayments of floating rate loans. Sources say other companies may use this option if funding conditions remain so attractive in public markets.