KfW

Sterling issuance from non-UK SSAs kept up its record start to the year this week, as UK bank treasuries are searching for safe places to put sterling, afraid the country will leave the EU without an exit deal.

Three sterling deals hit the SSA market on Tuesday, bringing this year’s total volume to more than double last year’s and indicating that issuers and investors are yet to be put off by the confusion surrounding Brexit.

Export Development Canada is set to become the fourth public sector borrower to issue a debut Sonia bond this year, after picking banks on Monday for a three year bond linked to the reference rate. Meanwhile, KfW will return for its second sterling benchmark of 2019, sticking with a five year maturity it issued in earlier in the month.

Dollar SSA issuance picked up in earnest this week after a slower than usual start to the year, with a rich variety of borrowers printing deals, some in record size or with record books. Conditions are such that SSA bankers are confident supply will keep coming and demand stay high for the next few weeks — cheering news for one sovereign issuer looking to make a comeback in the currency.

Guarantor: Federal Republic of Germany

Public sector borrowers printed over $10bn of bonds on Tuesday in a dollar market that SSA bankers expect to keep its momentum in the weeks ahead.

CPPIB Capital was comfortably oversubscribed for its $2bn trade on Monday with the dollar SSA market remaining attractive at the short end. Agence Francaise de Developpement, KfW and Kommuninvest will look to tap into lucrative conditions in the currency after mandating banks for deals on Tuesday.

Guarantor: Federal Republic of Germany

The European Bank for Reconstruction and Development on Wednesday became the third public sector borrower to issue an inaugural Sonia-linked bond in 2019, with the deal marking the borrower’s largest sterling bond to date.

Belgium and KfW received well oversubscribed order books for 10 year euro benchmarks on Tuesday, with several public sector borrowers set to follow in the euro market this week.

The European Financial Stability Facility rebooted the euro public sector market on Monday with an intraday execution ahead of what SSA bankers expect to be a busy week for supply. Belgium and KfW are already on screens for benchmark trades in the 10 year part of the curve.

KfW has appointed a senior funding manager to its new issues team in Frankfurt, with responsibility for sterling and dollar deals.