Pre-migration untagged articles

Sovereign, supranational and agency issuers stuck to the short end of the curve this week as many CP investors took a breather to assess the market direction.

It’s rare for the capital markets to claim being touched by the hand of history. But this week’s launch of the European Financial Stability Facility bond was as close as markets can come to a historic and transcendent moment.

Sovereigns, supranationals and agencies reined in their issuance of commercial paper this week, having sold just $7.89bn by Thursday evening. This contrasts sharply with last week, where issuance volumes were $19.756bn, according to Dealogic.

Dealer of private EMTNs: Non-syndicated deals for less than $250m excluding financial repackaged SPVs, self-led deals and issues with a term of less than 365 days

Issuance from sovereigns, supranationals and agencies in the MTN market this week remained stunted by investors and borrowers’ fixation with public markets.

Russian miner Rusal, the world’s largest aluminium producer, plans to take advantage of improved conditions to refinance $5bn in international bank loans this year, the company’s deputy CEO and director of capital markets, Oleg Mukhamedshin, told EuroWeek. Read more about Rusal’s refinancing plans on Friday.

Swissport sold a Sfr750m Swiss franc and dollar junk bond on Monday that was more than 10 times covered, demonstrating the strong bid for European high yield debt. The deal followed triple-C rated Ono’s Eu460m bond on Friday that was similarly oversubscribed. Both deals have traded up sharply in the secondary market. High yield syndicate bankers doubt demand will wane over the next few months. This bodes well for Fresenius and Bakkavor, both of which are expected to price bonds on Friday.

On the back of a successful syndication for the UK’s ED&F Man, two more commodity trading firms are out in the loan market. Trafigura is looking to refinance part of a $2.435bn multi-currency facility signed in March last year, which included a $625m one year piece, and more borrowers from the sector are expected to follow soon. To find out more, read EuroWeek this Friday.

The EFSF broke records for interest in its Eu5bn five year debut on Tuesday. With over Eu30bn of orders received before books officially opened the deal was never going to be anything other than a blowout success. The EIB followed with a three year EARN that attracted Eu8bn of orders before books opened on Wednesday morning. With initial whispers around mid-swaps minus 5bp, this deal will now price 3bp tighter. There was also positive economic and auction news from Spain. Are these the first definitive signs of the end of the European sovereign crisis or should peripheral credits like Spain’s Frob, which mandated banks for a transaction this week, be beating a path to investors’ doors to take the cash while the going is good? Read EuroWeek to find out and for full analysis of the EFSF’s landmark deal.

Four weeks into 2011 and European ABS has a new post-crisis asset class — UK auto loans. While the primary market last year leaned heavily on UK prime, Dutch prime, and German autos, there was no reason why a UK auto deal shouldn’t have worked. Lloyds Banking Group, always an innovative issuer, will follow FirstRand’s Turbo Finance deal with Cars 2011-1. But if the investor base in European ABS remains narrow, how will another asset class are when competing for the same scarce funds? Read EuroWeek on Friday for more.

A flurry of borrowers have piled into senior unsecured this week, eager to take advantage of improving conditions in a market that has been lukewarm for months. HSBC, Intesa SanPaolo and the Swedish National Housing Finance Company have all launched euro benchmarks that, crucially, have been well oversubscribed and priced inside guidance. EuroWeek on Friday asks how long the good times will last — as well as offering full analysis of the week’s deals.

Portuguese financial Banco Espirito Santo is to sell Eu2.7bn of loans as it attempts to deleverage its balance sheet. The portfolio sale is the talk of the trading desks as market participants say that the sale is a result of the challenges the bank faces in accessing the capital markets. One analyst also suggested that discussions of another round of financial stress tests for European banks were at play. For more information, read EuroWeek this Friday.