RBC Capital Markets

Commonwealth Bank of Australia and Royal Bank of Canada were both looking to sell sterling debt in the belly of the curve on Wednesday, the Australian issuer looking for fixed rate notes and the Canadian bank for floating rate paper. RBC is targeting an aggressive level compared to CBA, according to FIG syndicate managers.

MOVES IN BRIEF

European Investment Bank and Export Development Canada showed their Australian dollar appeal this week, selling hefty deals in the belly of the curve. Japanese demand propelled the EIB to success, allowing the issuer to sell its largest Kangaroo deal in three years.

Storming conditions in dollars this week led to a series of blow-out deals — but a large amount of supply in the last two weeks, plus uncertainty over the outcome of upcoming European elections and what the European Central Bank will do at its next meeting could mean that issuance conditions won’t be red hot for much longer. Those problems could also affect euros — where issuers considering deals at the 10 year part of the curve have the added difficulty of offering a sufficiently enticing yield.

Public sector issuers that ventured into dollars this week were inundated with demand, allowing them to bring a series of oversubscribed deals in the short to medium part of the curve. Others are tipped to follow if conditions are stable next week — after a stormy afternoon of trading across credit markets on Thursday.

The Province of British Columbia will make its Kangaroo debut on Friday, drawing strong demand from investors. The deal will round off a hot week for issuance for Kangaroos, during which the Asian Development Bank sold the largest such deal from a sovereign, supranational or agency in almost three years.

RBC Capital Markets’ Stuart McGregor revealed himself to be a lover of prog rock last week, after telling one of our moles that he was off to see the legendary Yes at the Royal Albert Hall on May 8.

After weeks of limited issuance, the dollar market is primed to spark into life next week as investors clamour for a chance to use up accumulated cash. The European Investment Bank and Municipality Finance are tipped to launch deals, while Ontario stole a march on other issuers by mandating banks on Thursday afternoon for a benchmark.

Another day, another bond issue for Volkswagen, which plunged into the sterling market on Tuesday, only three UK working days after a €300m three year FRN that was tightly priced but did not set the world alight.

Two more instalments in the unfolding saga of the corporate floating rate note appeared this week, with a €500m 4.9 year deal by Société des Autoroutes Paris-Rhin-Rhône on Tuesday and a €300m three year by Volkswagen Bank on Wednesday.

French geosciences firm CGG came to the high yield bond market for the second time in less than a fortnight on Monday, following its euro debut with a return to dollars.

Inter-American Development Bank treasurer Søren Elbech signed off with a final benchmark before he moves to Danish wind turbine manufacturer Vestas at the end of the month, raising $2bn with a July 2017 global bond on Wednesday. Despite the deal being slightly undersubscribed, bankers away from the trade were impressed that the supranational was able to raise so much cash at a near rock-bottom yield.