KfW

Buoyant conditions on the first proper day of trading after the Christmas break indicate that SSAs are in for a red hot start to issuance next week when as much as €25bn of benchmark issuance could hit screens. But ultra low yields could mean issuers have to cough up when it comes to new issue premia.

KfW paper will be in shorter supply next year, as the German government guaranteed agency is set to raise as much as €10bn less than its 2012 target.

Rentenbank was set to price on Tuesday afternoon what is likely to be its last dollar global before it receives an explicit government guarantee from Germany. The deal was a complete blow out and looks set to be priced on top of fellow German agency KfW’s secondary curve, according to the leads.

KfW took advantage of scant supply in the sterling market on Thursday to print an oversized £750m five year deal. But despite the respectable deal size, lead managers said it could have been even bigger and that could prompt a wave of issuance.

KfW priced €5bn seven year global at 5bp over mid-swaps on Wednesday afternoon, ahead of large fundraising efforts from the European Union and European Financial Stability Facility expected to begin next week.

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.