KfW

Sovereign, supranational and agency issuers were able to raise $10.5bn of bonds in dollars this week, despite volatility in US rates and Treasury yields plunging ever lower.

Sovereign, supranational and agency Kangaroo issuance in 2015 so far reached over A$4bn ($3.3bn) this week, topping volumes in the format for the whole of January 2014. The news comes as Nederlandse Waterschapsbank announced a new Kangaroo line and KfW reopened a five year bond in the currency.

KfW opened books on a tap of a 10 year Kangaroo on Tuesday as issuers took over A$1bn ($841.6m) out of the Australian dollar market, with deals from Inter-American Development Bank, the Province of Manitoba and Rentenbank.

KfW, Asian Development Bank and Agence Française de Développement will sell dollar benchmarks on Tuesday in what SSA bankers said is a calmer backdrop than last week. Export-Import Bank of Korea was first to come to market in dollars this week and was set to price a dual tranche deal during the New York day on Monday as GlobalCapital went to press.

Attractive funding rates and strong demand from Asian investors drew a flock of supranational and agency names to Australian dollars this week — and bankers say at least six names are looking to print in a market that often offers more attractive funding levels than dollars or euros.

The European Investment Bank and KfW completed their first sterling deals of 2015 on Thursday, 8 January, in what bankers said was a sign of more to come, as the sterling/euro basis swap is well in favour of euro based issuers.

KfW showed that pricing through mid-swaps is no obstacle at the start of 2015, as on Thursday it built a comfortably oversubscribed book on the first euro deal to come through swaps this year. The issuer plumped for a 10 year deal — an option also taken by Province of Quebec on Thursday and a tenor that many SSA officials think the European Financial Stability Facility will take next week.

European Investment Bank and KfW found strong demand in sterling on Thursday as bank treasuries, central banks and real money accounts piled in for a piece of the issuers’ inaugural deals in the currency for 2015.

KfW priced a more than twice subscribed Kangaroo bond on Wednesday — its first deal in the format this year — as other supranationals and agencies lined up with taps and new issues for their own inaugural 2015 Australian dollar deals.

KfW targeted the belly of the Kangaroo curve for its first new issue of the year on Tuesday.

Having expected to hold off for a week or two, some sovereign, supranational and agency borrowers are rethinking their plans and contemplating the possibility of bringing forward euro issuance plans to this week.

KfW has sold a rare, privately placed note with a step-up inverse floating rate structure, which dealers said could be a sign of other similar trades to come.