Germany
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The combination of Deutsche Hypo into NordLB has failed to cause much of a stir in the covered bond market as, even though the merged cover pools will be very different, spreads between their Pfandbrief curves have little room for manoeuvre. -
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State of North Rhine-Westphalia’s third and biggest century bond built an impressive order book in terms of size and number of accounts from a diverse range of investors this week, proving this niche part of the curve is increasingly popular with buyers.
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Several prominent Schuldschein arrangers believe the market must stop setting Euribor floors at 0% this year if it is to lure international borrowers back from the bond markets. If SSD arrangers can persuade investors to settle for lower minimums, corporate treasurers may find the SSD market a compelling alternative to bond markets once more, writes Silas Brown.
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A €1.2bn sale of new Delivery Hero shares showed that investors are ready and waiting to commit capital to new equity capital markets deals in 2021. The transaction showed that demand for high growth tech names remains strong, despite a recent trend of investors buying into more cyclical companies.
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Public sector borrowers soaked up huge demand in the euro market on Tuesday including the State of North Rhine-Westphalia, which printed its biggest ever 100 year bond despite offering a yield of less than 1%.
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KfW and Swedish Export Credit Corporation (SEK) achieved strong results in sterling on Tuesday despite extremely volatile conditions in the currency as a result of uncertainty around the impact of Brexit and the rising cases of coronavirus in the UK, which has affected swap spreads and the cross-currency basis swap for non-UK borrowers.
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Schuldschein bankers want to make sure last year’s drop in international borrowers was a temporary symptom of the coronavirus pandemic. But with restrictions on travel as well as government support programmes rolling into this year, there is little optimism that non-German issuers will return soon.
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Aareal Bank priced the first covered bond of the year flat to its curve and, unusually, the first leg of the swap payment was priced below the European Central Bank’s deposit rate of minus 0.50%. Even so, the bonds attracted good demand.
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Berenberg has strengthened its investment banking division with two senior hires, the latest in a series of appointments it has made.
