RBC Capital Markets

The European Investment Bank (EIB) and Municipality Finance announced sterling transactions for Tuesday, making this January a remarkably busy one for the currency.

A trio of Europe’s less frequent public sector borrowers are set to hit screens for euro transactions on Tuesday, following a long end benchmark from a French agency on January 26.

GDS Holdings raised $286m from the sale of new and existing equity last Friday after demand came in better than expected, allowing the secondary portion to be doubled.

While European Central Bank president Mario Draghi kept firmly to his course of accommodative monetary policy at Thursday’s press conference, the euro strengthened further against the dollar, dragging Bund yields up with it. Lewis McLellan reports.

Sterling issuance was thin this week relative to its scorching start to the year although there was still room for Kommunalbanken to print its largest ever deal in the currency. Strong supply is on the way from the UK Debt Management Office but while demand is as good as some bankers have ever seen, other deals may be limited by technical factors.

Corporate bond investors were offered 10 year and 11.5 year new issues on Wednesday and combined order books of over €4.4bn showed there is significant demand for longer tenors in this market.

SNCF Réseau has hit screens for a 30 year bond to be sold this Friday. The borrower announced the mandate just after the completion of the European Central Bank's governing council meeting press conference on Thursday.

Corporate bond investors were treated to a relative feast of issuance on Wednesday following a meagre €850m of supply in the first two days of the week. A trio of higher beta names offered a variety of tenors and spreads for investors to choose from.

Chinese data centre operator GDS Holdings has opened a follow-on placement of its American Depository Shares (ADS), eyeing around $200m.

Kommunalbanken added to a stellar start to the year for sterling with a £350m trade — its largest ever trade in the currency. Cross currency basis swap levels meant the borrower capped the size of its deal despite building a nearly £550m book, according to leads — suggesting excess demand for other SSAs to tap this week.

Axilone, Comexposium and Hurtigruten have begun the syndication of a combined deal volume of €1.5bn, but European leveraged loan spreads are now so tight that some investors are heading for the exit.

Sterling conditions are searing hot for public sector borrowers, with records breaking left, right and centre. And despite investors taking large volumes out of the market, SSA bankers are confident that more supply can be handled.