Société Générale

A quiet week for corporate bond issuance may have helped BMW Finance achieve tight pricing on Thursday, but selling its largest ever deal with new issue premiums in single digits was still an excellent outcome when compared to the premiums being paid at the start of the month.

Asia’s sustainability market took a big step forward this week when Kookmin Bank priced a Basel III-compliant tier two bond with a sustainability label — the first of its kind in the region. Morgan Davis reports.

Nederlandse Waterschapsbank was over three times covered for a 10 year affordable housing bond on Wednesday, allowing it to tighten multiple times during pricing to leave no concession, according to on-looking bankers. Meanwhile, the State of North Rhine-Westphalia has appointed banks to arrange a roadshow in Europe and Asia for a long dated euro sustainability bond.

Greece’s highly anticipated return to the public bond markets on Tuesday met with a strong reception from investors. With up to €4.5bn more of benchmark bonds to issue in 2019, Greece is expected to return to the markets for a second syndication this year, which bankers say could be in the 10 year part of the curve. Cyprus will look to follow up on Greece’s success after setting out plans to roadshow a euro transaction in February.

Austria's 10 year syndication on Tuesday received a final order book that was almost twice the size of its previous record volume. Belgium was also in the market with its second OLO of the year, opting this time for a much longer maturity. Both deals were in keeping with eurozone sovereign supply this year, comfortably printing a combined €10bn from over €55bn of orders.

‘Tier two’ and ‘sustainability’ are labels that have never previously been combined in Asia. At least not until this week, when Kookmin Bank raised $450m from a Basel III-compliant deal.

Austria, Belgium and Greece went out with mandates for syndications at various parts of the euro curve on Monday, just a day before a crunch vote in the UK Parliament on amendments to prime minster Theresa May’s Brexit plan. But bankers said concerns around Brexit are limited and are no roadblock to sovereign issuance.

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Wider euro spreads versus swaps and Bunds had already led to some superstrong trades in the currency this year, but Spain outdid them all this week with the largest ever book for a public sector euro benchmark. Every other euro deal also attracted heavy oversubscription with minimal concession, paving the way for expected supply next week from a “large German agency in the short end” and a “central European sovereign in 10 years”, according to one head of SSA syndicate.

Société Générale this week issued a highly oversubscribed €1bn eight year that paved the way for follow-on French covered bonds from Credit Mutuel CIC — which attracted a €5bn order book for its two part deal — and La Banque Postale.

French supermarket chain Auchan attracted plenty of demand for its third consecutive January new issue but it had to pay a hefty new issue premium to ensure the deal got done. The supermarket sector is one of several retail sectors priming investors for poor annual results.

South Korea’s Suhyup Bank returned to the international bond market on Tuesday after a near five year hiatus to raise $300m.