JP Morgan

It was a moderate week for supply in the primary euro public sector bond market but the issuers that did come found ample demand, setting up a decent backdrop for the expected arrival of the European Union’s big borrowing programme next week.

Rating: Baa1/A-/A+ (issuer expected)

The leading US investment banks raked in fees from equity origination in the third quarter, with Goldman Sachs, Morgan Stanley and Bank of America all doubling their ECM revenues year-on-year.

FIG borrowers may be well funded, but rates are low and market conditions are good enough to support opportunistic issuance — as was shown this week by a slate of deals across the capital structure. Given a volatile end to 2020 is likely, issuers will need to stay alert and take advantage of funding windows as they arise, write Frank Jackman and Bill Thornhill.

High grade corporate bond investors had their pick of crossover deals this week, with Inwit, Veolia and Cellnex offering trades on the periphery of junk ratings, with demand solid as risk appetite remains strong.

Enel, the Italian energy company, printed the first sustainability-linked bond in sterling this week well through its curve, sparking expectations of far wider issuance in the still fledgling market.

Austria built a large order book as it came to the market for its final syndication of the year on Thursday, ahead of the expected arrival of the European Union as a mega borrower next week.

The Council of Europe Development Bank (CEB) took advantage of a strong market on Wednesday to issue its first ever benchmark transaction for pre-funding purposes.

China raised a combined $6bn from a four tranche transaction on Wednesday, turning to US investors for the first time despite rising tensions between the two countries. It appeared a smart move, helping the bonds price well inside fair value. Morgan Davis reports.

Asahi, Japan’s largest brewer, drew the biggest demand in the high grade corporate bond market on Wednesday, adding to the recent trend of issuers from the country getting a roaring response from investors in Europe.

A weighty corporate hedging transaction has added to the momentum of the US rates market’s transition from Libor. JP Morgan executed a $500m swap referencing Sofr with a blue chip corporate, Unilever.

The Republic of Austria picked banks to lead a new 20 year euro benchmark on Wednesday, while the European Stability Mechanism surprised some market participants by sounding out banks for a deal next week, which could clash with the EU’s grand arrival as a supersized issuer.