NatWest Markets
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Euro agencies favoured fives over the last seven days, as KfW smashed its order record and a pair of French agencies brought taps at sizes multiple times their target. With some SSA bankers saying conditions are the best they have ever seen, supply looks likely to keep coming. -
There was another scorching start to the year for eurozone sovereigns this week with yet more records dropping as Belgium took its largest ever number of orders and Austria sold its biggest ever deal from its largest ever book. But it was the nature of the successes — Belgium with a long dated trade and Austria the most expensive 10 year of the year so far — that really caught the eye.
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Bpifrance rode a wave of booming market sentiment following a dovish US Federal Reserve meeting on Thursday to sell its joint largest ever single issue, after originally aiming for a minimum size that was just a third of the amount it ended up printing.
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Austria's 10 year syndication on Tuesday received a final order book that was almost twice the size of its previous record volume. Belgium was also in the market with its second OLO of the year, opting this time for a much longer maturity. Both deals were in keeping with eurozone sovereign supply this year, comfortably printing a combined €10bn from over €55bn of orders.
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Austria, Belgium and Greece went out with mandates for syndications at various parts of the euro curve on Monday, just a day before a crunch vote in the UK Parliament on amendments to prime minster Theresa May’s Brexit plan. But bankers said concerns around Brexit are limited and are no roadblock to sovereign issuance.
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Sterling issuance from non-UK SSAs kept up its record start to the year this week, as UK bank treasuries are searching for safe places to put sterling, afraid the country will leave the EU without an exit deal.
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Southern Water launched a tender offer on Wednesday as the last step in a full-scale revamp of its capital structure — a journey which helped RBS handle nearly £1.3bn in uncollateralised swap exposure — in the largest ever repackaging of inflation risk. Ross Lancaster and Owen Sanderson report.
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French hotel company Accor launched new hybrid and senior bond issues on Thursday after announcing the deals at the end of last week. The new deals finance tender offers for some of the company’s existing hybrid and senior notes.
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World Bank on Thursday added to a record breaking start to the year for public sector sterling issuance with yet another large trade. A German agency is set to bring another deal this Friday in a market that shows no signs of slowing down.
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Three sterling deals hit the SSA market on Tuesday, bringing this year’s total volume to more than double last year’s and indicating that issuers and investors are yet to be put off by the confusion surrounding Brexit.
