KfW

KfW became the second issuer to take advantage of the liquidity on offer in the belly of the euro curve this week, raising €5bn a day after the European Stability Mechanism pulled in nearly €21bn of orders to its debut benchmark. More borrowers are set to follow as issuers look to take advantage of buoyant conditions despite the looming deadline over the US debt ceiling negotiations.

Two peripheral sovereigns mandated in the wake of the European Stability Mechanism’s debut on Tuesday, as market tone in euros remained strong despite the clock ticking on the US debt ceiling negotiations and the government still in shutdown. Italy mandated banks for a debut seven year benchmark while Spain hired for a 30 year syndication.

Plenty of SSA issuers took a big bite out of their funding targets in the short window of issuance between the end of the summer and this week's FOMC meeting. Here we provide updated figures on selected European supranationals and agencies.

Province of Ontario is the latest issuer expected to bring a five year dollar deal next week, adding to a hefty SSA pipeline. There are also thought to be opportunities for long dated euro deals, with the Federal Reserve’s unexpected decision not to slow its asset purchasing programme causing a steepening in the euro curve.

Sovereign, supranational and agency issuers have eschewed the new issue market so far this week because of the volatility inducing potential of the Federal Reserve Open Markets Committee meeting which kicks off on Wednesday. But several are in the pipeline to take advantage of the calmer markets expected next week.

KfW and the African Development Bank both sold long 10 year Kangaroo debt on Wednesday, with the former opening a new line and the latter tapping its outstanding bond. KfW was able to reach a wider investor base than recent 10 year Kangas owing to its strong reputation in the market. Export Development Canada also took the opportunity to increase its five year Aussie dollar bond.

KFW began bookbuilding for a new long 10 year Kangaroo bond on Tuesday, looking to secure demand from Japanese investors focusing on the far end of the curve. Export Development Canada is also selling new Kangaroo debt, opting for a five year maturity.

German development bank, KfW is set to price on Tuesday, the biggest ever seven year global dollar bond away from issuance by US GSE borrowers. The issuer will price a $3bn deal in line with guidance. Two other SSA borrowers tapped shorter maturities in the currency.

There may have been the odd stinker of a deal this year but it is hard to fault SSA borrowers as a group. They went after the money this year with aggression, front-loading programmes and bringing some spectacular deals. Some market watchers were looking forward to the autumn issuance season being something of a repeat of the first three months of the year, but it does not look like that will happen. And that is a good thing.

Supranationals and agencies placed a flurry of Kangaroo deals this week, as the market showed no sign of calming after a busy month.

Finland has hired five banks to run a five year syndication, making it the first borrower to tackle a new euro benchmark in the belly of the curve since the summer break. KfW, meanwhile, priced an oversubscribed 10 year on Tuesday afternoon while Rentenbank got a short dated print away.

Ahead of an expected flood of issuance kicking off in the last week of August, here are the updated funding scores for selected European supranational and agency borrowers.