KfW

KfW has mandated a trio of banks to run a seven year euro trade in what could be the only euro benchmark of the week.

A lack of SSA fixed rate sterling supply allowed KfW to price on Thursday a £300m tap of its 1.75% January 2016s at a tight spread in a bigger size than planned. The deal may encourage more sterling issuance in coming days.

The EIB priced a Sfr100m ($106.3) 1.125% April 2023 deal at mid-swaps plus 15bps on Thursday afternoon, hot on the heels of a pair of niche currency trades from KfW.

KfW is set to price a $3bn 10 year global bond on Wednesday afternoon – the first 10 year by a European agency or supranational this year since the German borrower issued in the same tenor in January.

The European Investment Bank and KfW added to the glut of dollar benchmark supply on Tuesday with new benchmark trades.

Several borrowers are working on dollar deals for as early as next week, SSA Markets understands. Dollars is set to be the go-to currency for benchmark issues in coming weeks. Tight swap spreads are putting investors off across the board but the central bank bid will support dollar deals.

The World Bank and KfW capitalised on strong momentum in the Russian rouble Eurobond market to tap an existing line and print a new issue, respectively.

NRW.Bank priced a 10 year on Monday afternoon, offering investors a premium of just a few basis points over its curve. KfW is also thought to be looking at a euro benchmark, which could come as soon as Tuesday.

A number of borrowers announced benchmark mandates in the dollar markets following Monday’s Labor Day holiday.

FMS Wertmanagement justified its decision to wait for a less congested new issue market on Tuesday when it priced an oversubscribed €2.5bn deal in an unusual maturity where such sizes are far from expected.

German wind-up agency, FMS Wertmanagement finally dipped a toe in the choppy waters of the euro market on Monday with a new benchmark mandate. But beyond this deal, the euro pipeline is bear for the week ahead.

German agency KfW printed on Tuesday the only the second SSA dollar global benchmark since July. The deal starved dollar market took the paper 2bp through initial price thoughts. But senior SSA bankers suspect the meagre returns to US Treasuries that the sector can offer investors may hinder forthcoming supply.