Nordics

A call by US Treasury secretary Steven Mnuchin this week to lessen the capital burden on banks had a bigger effect on US rates than a well telegraphed Federal Reserve target rate rise, creating some breathing space in long end swap spreads. That could ease long dated public sector bond issuance, but with euro market offering enviable duration funding, there may not be a queue of borrowers ready to print, writes Craig McGlashan.

It is often suggested that issuers have to pay up for issuing sub-benchmark sized deals. However, this week two corporate issuers printed successful €300m transactions with little discernible premium compared to benchmark transactions.

All the action in the SSA bond markets switched to euros on Wednesday morning with the US Federal Reserve's imminent decision on interest rates quieting the dollar market.

Kommunalbanken built a doubly subscribed book on Tuesday for a long three year dollar deal that bankers said should give confidence to the market after a similar trade from KommuneKredit two weeks ago fell short of full subscription.

SEB issued a tightly priced €1bn seven year covered bond on Tuesday, but the slim scale of oversubscription reflected investors’ resistance in the fatigued market.

A pair of SSAs are set to nip in with dollar deals ahead of a US Federal Open Market Committee meeting on Wednesday at which investors overwhelmingly expect a target rate rise — although the strength of that expectation has dipped slightly.

Tennet, the Dutch electricity grid company, brought a €1bn dual tranche green bond issue today that was oversubscribed, but by less than has been common, suggesting that demand for corporate bonds may be cooling.

Covering four tranches, two currencies and fixed and floating rate payouts, what could be the largest high yield bond since April 2016 hit screens on Monday as Intrum Justitia embarked upon a week-long roadshow for a €3bn bond.

The Swedish financial supervisory authority (Finansinspektionen) has proposed tightening mortgage lending criteria in an effort to slow growth in household debt, a decision which analysts believe is likely to be positive for covered bonds.

The scores have been counted and the results for the benchmarks sold in the week commencing May 29 are in. The week produced only a smattering of public sector trades trades, and not all were warmly received.

Suomen Hypoteekkiyhdistys (Hypo) and Bank of New Zealand have announced marketing programmes ahead of expected covered bond deals.

Berlin Hyp (BHH) issued a tightly priced Pfandbrief on Wednesday, drawing strong demand for a rare deal backed by green commercial mortgage assets. At the same time the Mortgage Society of Finland mandated leads for a sub-benchmark transaction.