RBC Capital Markets

Guarantor: Financial Market Stabilisation Fund of the Federal Republic of Germany

The sterling market for public sector borrowers is enjoying its best ever start to a year thanks to superlative conditions, Sonia linked debuts and a UK parliamentary vote on Brexit next week.

There has been precious little cheer in the dollar market but Anheuser Busch Inbev (AB InBev) provided some on Thursday when it printed the biggest corporate investment grade trade since October amid signs of improving sentiment.

Sterling issuance from non-UK public sector borrowers has made by far its strongest ever start to a calendar year, with borrowers and bankers citing liquidity-laden investors and a crucial parliamentary vote on Brexit next week as factors behind the rush. Council of Europe Development Bank (CEB) and FMS Wertmanagement added to the feast on Thursday, while Inter-American Development Bank will bring yet another trade this Friday.

Mizuho International said it had hired Christoph Seibel, head of EMEA corporate debt capital markets at RBC Capital Markets, to be chief executive of its EU operations, Mizuho Securities Europe.

Appetite for eurozone sovereigns is showing no signs of slowing down after Ireland and Portugal joined Belgium this week in scoring their largest ever syndication order books. Several other borrowers sold euro trades on Wednesday, with more supply expected this week as the pipeline has “accelerated” ahead of next week’s parliamentary vote on the UK’s Brexit deal.

The European Bank for Reconstruction and Development on Wednesday became the third public sector borrower to issue an inaugural Sonia-linked bond in 2019, with the deal marking the borrower’s largest sterling bond to date.

Belgium and KfW received well oversubscribed order books for 10 year euro benchmarks on Tuesday, with several public sector borrowers set to follow in the euro market this week.

The International Finance Corp sold its joint biggest sterling bond by volume with its debut Sonia-linked bond on Tuesday, adding to the flurry of trades in the format since the start of the year. But the Sonia rush is “not over yet”, according to a banker at one of the leads, with a few more on the horizon before the UK parliament votes on Theresa May's Brexit deal next week.

FMS Wertmanagement was quick to execute its inaugural Sonia-linked bond on Monday amid strong sterling floater demand. That hunger is showing no signs of abating, with International Finance Corporation looking to follow with its own debut Sonia bond on Tuesday.

Rating: Aaa/AAA/AAA

The European Investment Bank and KfW comfortably raised a combined £2.25bn on Thursday after receiving whopping investor demand for benchmark trades. This Friday is set to add to the sterling glut, with deals from the Asian Development Bank, Bank Nederlandse Gemeenten and Swedish Export Credit Corporation.