NatWest Markets

Elation in the euro markets after the first round of the French presidential election at the weekend continues to wash over the public sector bond markets, with the Province of Quebec selling its largest ever benchmark in the currency and Spain printing €5bn of inflation-linked paper.

The European Financial Stability Facility on Tuesday priced a dual tranche deal that bankers are describing as possibly its greatest ever, laying to rest some of its other long dated trades this year that drew criticism. A pair of other issuers have also hit screens in a euro market enjoying what one syndicate head called “probably the best conditions we’ve seen in months”.

Uncertainty over upcoming European elections could make short term debt investors “run to the sidelines”, said a commercial paper banker.

UK hotel group Travelodge and social care firm Voyage Care both started roadshows on Wednesday for £165m and £250m of notes, respectively.

The pace of borrowing has slackened for public sector borrowers as Easter approaches but a few are still out hunting for second quarter funding.

L-Bank shattered its sterling size record on Wednesday, exceeding the expectations of even its leads with a £500m five year deal.

Public sector borrowers are lining up a three pronged attack on Wednesday in a dollar market that is enjoying its widest swap spreads of the year. Quebec is attempting the first 10 year dollar benchmark since the first week of the year, KfW is out in fives — a part of the curve that has also become attractive in euros — and the Inter-American Development Bank is coming at the short end.

Acetow, the cigarette filter maker Blackstone is carving out of parent Solvay, has launched €630m-equivalent of loan facilities for the buyout, four months after it was announced.

Inovyn, the chlorvinyls firm owned by chemicals group Ineos, and French food producer Labeyrie both joined the bond-to-loan refinancing trend in the leveraged finance market this week, holding a lender call and bank meeting respectively for term loan deals of at least €500m each.

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The super strong bid for public sector dollar paper shows no signs of letting up, with Sweden this week printing the tightest deal to mid-swaps of 2017 — despite the large volume of paper already printed this year.

CPPIB Capital is looking to step across the Atlantic into euros, selecting four banks to roadshow its euro debut. Elsewhere, the European Financial Stability Facility (EFSF) sent out its first request for proposals for the second quarter.