NatWest Markets

Guarantor: Federal Republic of Germany

Sterling is set to play a bigger part in the socially responsible bond market as a result of incoming reforms that are putting the pressure on UK pension funds to focus on environmental, social or governance (ESG) factors in their investments, writes Burhan Khadbai.

Rentenbank printed a £250m December 2026 bond on Tuesday, as top rated issuers found plenty of demand at the longer end of the sterling curve.

An infrequent FIG issuer returned to the medium term note (MTN) market this week to place the second of a pair of identical floating rate notes (FRN) this month. While on Wednesday, another bank brought back a structure that has rarely been seen since the financial crisis, according to one banker.

Industrial and Commercial Bank of China and Banco Santander tapped the sterling market for senior bonds this week and what bankers said were high-quality orders led both issuers to increase the size of the benchmark transactions.

Investors brushed off the coronation of a new pro-Brexit prime minister in the UK on Tuesday to pile into a KfW trade and set a new size record for the sterling SSA green bond market.

KfW picked banks on Monday for its first green bond in sterling since July 2015, as it increases the volume of its green bonds under its new framework.

National Australia Bank has hired Ross McEwan as its new group CEO, as the bank seeks to improve its reputation after a damning report criticised its conduct.

The UK’s Bruntwood SciTech has signed a £185m green facility, with the property company planning to use part of the funds to develop specialist scientific workspaces in the north of England.

NatWest Markets, the investment bank owned by Royal Bank of Scotland, has launched its own environmental, social and governance deposit product, responding to a desire among companies, public bodies and investment firms to invest their cash ethically.

New issue premiums have been widening somewhat in Europe's corporate bond market in recent weeks, but Accent, a UK housing association, priced its debut bond at a level bankers said was tighter than where comparable issuers were trading.

Last week’s tightly priced bond issue by KfW has inspired a slew of issuers to print three year dollar notes this week. The Asian Development Bank was first off the blocks on Tuesday with a new benchmark, while a tight Export Development Canada trade followed the next day.