Norway

Europe’s IPO market took a couple of knocks this week when one flotation was pulled and another traded sharply down on its debut, partly because investor sentiment has cooled. But there was still enough vigour in the market to ensure a successful conclusion to the €3bn re-privatisation of Allied Irish Banks (AIB), write John Loh and Jon Hay.

Allied Irish Banks again tightened guidance on its London and Dublin IPO this evening, moving the lower and upper limits to €4.30 to €4.50 a share.

Sparebank 1 Boligkreditt found solid demand for its €1bn seven year on Monday, even though the transaction vied for investors’ attention with another deal in the same maturity.

Rating: Aaa/AAA

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.

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.

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.

There was just a smattering of public sector dollar deals this week — but a wide difference in how they fared.

Public sector borrowers are aiming for the short end of the dollar curve, as swap spreads in the area hover around the spot in which they started 2017, having dropped sharply from the year’s highs hit in March.

Møre Boligkreditt found strong demand for its first euro covered bond which, because of its sub-benchmark size, offered substantially more spread than similar bonds. At the same time BayernLB said it would start a roadshow for a sterling senior unsecured and covered bond.

Sparebanken Sør Boligkreditt and Société Générale enjoyed solid receptions for their covered bonds this week, with the Norwegian issuer pricing flat to its curve.