Kommuninvest

Strong demand for the sole dollar effort of the week so far — a three year benchmark from Kommuninvest — has led to speculation that other issuers might look to bring dollar deals before the end of the week, with investor appetite looking to be sharp even while the US government remains shut down.

Kommuninvest is likely to open books on a dollar benchmark on Tuesday morning with price guidance inside initial price thoughts, SSA Markets understands, having begun sounding investors on Monday at a level that bankers away from the deal described as defensive. The deal marks the first dollar benchmark since the US government went into shutdown on October 1.

Kommuninvest, which sold a three year Swedish krona benchmark on Tuesday, is aiming to print a longer dated deal in its next sally into the domestic market.

SSA issuers have not ruled out next week as a potential window for dollar issuance, despite concerns stemming from the shutdown of US government agencies on Tuesday.

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.

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.

This week's scorecard features Scandinavian agencies. Most of the issuers are well funded for the year, with Municipality Finance leading the pack on 92% after its $1bn three year bond priced on Thursday.

Swedish municipality finance agency Kommuninvest is looking to access the dollar market with a three or five year benchmark in October, while rounding out its funding programme for the year through private placements and taps. Waiting until October may allow the Nordic agency to avoid clashes in a busy September, with issuers looking to come to market early in the month.

The Inter-American Development Bank (IADB) on Tuesday failed to silence those who thought that tight pricing on a dollar deal in the difficult seven year maturity was not the way to assure itself of a blowout book. It was set to print a $1bn trade on Tuesday afternoon where the book failed to reach full subscription. Kommuninvest, meanwhile, received a very different reaction when it went for a deal at the short end of the dollar curve.

The Inter-American Development Bank (IADB) and Kommuninvest beat a swift path to the doors of dollar investors on Monday by mandating for new benchmarks.

Kommuninvest is on the verge of mandating banks for a RegS/144A benchmark, SSA Markets understands.

Kommuninvest sold its fifth ever bond off of its Swedish krona benchmark programme on Wednesday during a speedy bookbuild. The issuer plans to sell around Skr25bn of debt in the currency this year as it aims to reduce its reliance on foreign currencies, though two dollar benchmarks are planned.