Pre-migration untagged articles

The front end of the euro swaps curve steepened this week, particularly in the 2s/5s. The 2s/10s rose from around 50bp to 54bp on Tuesday and hit a high yesterday (Thursday) morning of 55bp, before falling back to close at 53bp.

After weeks of anticipation, General Electric Capital Corp brought its first Mexican peso deal of the year this week, a Ps1bn ($94.9m), 10 year transaction paying a coupon of 8.3% and led by Merrill Lynch and Credit Suisse. Rentenbank also brought a 10 year trade, a Ps500m bond paying 8.5% and led by UBS and TD Securities. Merrill Lynch also led last month's Ps500m five year trade for the Province of Quebec, and there are similarities between the deals. Like the Quebec bond, the GECC transaction was sold heavily into the Mexican domestic market as well as the European investor base, confirming that peso trades are not brought simply to answer the retail sector's demand for high coupons.

Carrying on the theme from January, hybrid inflation-linked deals continued to rally in the EuroMTN market this week.

JP Morgan and Telefónica's Mexican unit joined GECC in jumping into to the local peso market this week, pricing peso denominated bonds to soak up local investor demand and lock in pricing as much as 40bp below dollar comparables. JP Morgan priced Ps2bn of zero coupon 15 year Udibonos on Wednesday and Telefónica Finanzas Mexico raised the equivalent of $600m by re-opening its five year floating rate and seven year fixed rate Mexican peso offerings first issued in September last year.

Kaupthing Bank expects to sell the first Icelandic covered bonds by the end of March, up to Ikr62bn (Eu800m) off a new Ikr200bn (Eu2.63bn) programme.

Dealers in the European commercial paper market had an up and down week, some days seeing strong flows while others, such as yesterday (Thursday) with only $11bn of trades, much more subdued.

Despite a compression in arbitrage between the dollar and euro markets, the dollar sector provided fertile funding ground for European borrowers this week. The European Investment Bank, Oesterreichische Kontrollbank and Landwirtschaftliche Rentenbank took advantage of strong demand for dollar bonds as coupons reached levels better than investors had been offered for a long time.

Despite a compression in arbitrage between the dollar and euro markets, the dollar sector provided fertile funding ground for European borrowers this week.

The US dollar primary market was inundated with large, swap-driven deals from European borrowers this week. All achieved attractive funding compared to the euro market, despite the comparatively expensive basis swap costs to return to euros.

The depth of the leveraged loan market is being tested this week as the debt financing for Europe's largest ever leveraged buy-out is launched into the market.

Italian car maker Fiat sold a Eu1bn high yield bond this week, less than a month after Sergio Marchionne, the company's CEO, said Fiat had no need to issue in the first half of this year.