Germany

The State of Baden-Wuerttemberg only managed to sell around half of its €1bn 10 year bond to investors on Tuesday as it came flat or slightly through its curve alongside competing supply in the tenor.

Doubts about the strength of covered bond investor demand were swept away on Tuesday after Berlin Hyp issued its most oversubscribed Pfandbrief in more than five years. The deal sends a strong signal to other issuers that may have been considering tapping the long end at negative yields.

The European Investment Bank will re-open the euro public sector bond new issue market for the last funding period of the year. Further issuers are expected to appear this week, trying to get in before the European Union’s giant borrowing programme begins.

Berlin Hyp has mandated leads for the first covered bond from the eurozone since June 30 and plans to issue a 10 year deal secured on green mortgages and has pledged to undertake a number of new strategic commitments.

Germany will issue green Bunds every year in the future, hoping to “establish a green euro interest rate benchmark, thus creating added value for the sustainable finance market”, its government said on Monday, as it revealed details of its first two green bond issues.

TAG Immobilien, one of Germany’s largest residential landlords, has issued a new €470m six-year convertible bond, tapping into heightened investor interest in German housing companies during the pandemic.

KfW began a new wave of 10 year supply this week, reopening the SSA market’s trickiest tenor for business. Issuers are so eager to access the maturity that they are having to jockey for position.

Guarantor: Federal Republic of Germany

A surge in repo-eligible issuance and deteriorating credit outlook for the retail and hotel commercial mortgage segments that secure some cover pools has pummelled the Pfandbrief market. This has been compounded by a lack of transparency leading to "an uneasy feeling" and ‘some uncertainty’ said bankers.

German electricity company RWE has sold €2bn of stock to fund its long term ambition to grow its renewable energy capacity, via one of the largest block trades this year.

German drug packaging manufacturer Gerresheimer launched a Schuldschein on Tuesday, according to market sources, ahead of €190m of debt maturing this November.

KfW opened up a window for 10 year dollar bonds in the public sector market on Tuesday amid a rise in long-dated US Treasury yields with two more borrowers hoping to find similar success in the tenor on Wednesday.