RBC Capital Markets

World Bank on Thursday added to a record breaking start to the year for public sector sterling issuance with yet another large trade. A German agency is set to bring another deal this Friday in a market that shows no signs of slowing down.

Oesterreichische Kontrollbank’s decision to mix up this week’s dollar supply with a three year benchmark reaped rewards on Thursday, as it recorded one of its largest ever allocations to central banks and one of its tightest ever US Treasury spreads. But some SSA bankers believe the dollar market might need a “breather” after a rampant start to the year.

Thames Water sold roughly £220m of US private placement notes this January.

The public sector dollar market on Wednesday showed that it had more than enough depth to cope with a pair of issuers bringing deals in the same maturity with just a basis point of difference in initial price thoughts, as both trades came in size and at tightened pricing. Another agency is set to dip into the demand on Thursday.

Three sterling deals hit the SSA market on Tuesday, bringing this year’s total volume to more than double last year’s and indicating that issuers and investors are yet to be put off by the confusion surrounding Brexit.

Two SSA borrowers will go head to head in the dollar market on Wednesday, bringing five year benchmarks with only 1bp difference in initial price thoughts.

Fearful of missing out and, in the absence of competing credit supply, investors piled into six covered bonds on Tuesday with a combined value of more than €6bn.Royal Bank of Canada’s deal epitomised the state of investor frenzy as it was able to issue the largest deal of the year with a negative new issue premium.

Export Development Canada is set to become the fourth public sector borrower to issue a debut Sonia bond this year, after picking banks on Monday for a three year bond linked to the reference rate. Meanwhile, KfW will return for its second sterling benchmark of 2019, sticking with a five year maturity it issued in earlier in the month.

Dollar SSA issuance picked up in earnest this week after a slower than usual start to the year, with a rich variety of borrowers printing deals, some in record size or with record books. Conditions are such that SSA bankers are confident supply will keep coming and demand stay high for the next few weeks — cheering news for one sovereign issuer looking to make a comeback in the currency.

A record start to the SSA sterling market came to a halt early this week, with borrowers avoiding prints as the UK Parliament delivered a historically large defeat to the government over its planned withdrawal agreement with the European Union. But once the big risk of the event was out the way, supply picked up — although with Brexit’s direction as uncertain as ever, further blocks to issuance are likely.

Rating: Aa1/A+/AA

The new-look Fox Corp made its dollar bond debut this week as the technical backdrop in the investment grade continued to improve with tightening spreads and thinner new issue concessions.