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Sovereigns

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◆ First of seven syndications breaks multiple records ◆ Investor engagement and communications helped stable execution ◆ Smaller programme this year but ‘still a lot’ to tackle
SSA
Busy and ‘euro-heavy’ week ahead but dollar pipeline also building with issuers set to bring forward bond plans
◆ Minimal premium paid ◆ Size at top of range ◆ Issuer seizes upon stability
◆ 'Cautious' start say some market participants ◆ New issue premium debated ◆ Price and size praised by rivals
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  • The political upheaval in Sri Lanka since October led S&P and Fitch to downgrade the sovereign’s ratings this week, following a similar move by Moody’s in November. All three agencies have pointed to heightened refinancing risks, with a weak rupee and rising bond yields restraining the country’s access to capital markets.
  • The Turkish government is mulling plans to print asset backed securities against the country's banks' mortgage stock. Some are calling the idea a “bad bank in disguise”. It isn't, but Turkey will need one.
  • Speculation is rife in the government bond markets that the European Central Bank will deploy special monetary policy to support Italian BTPs. Aside from being a ridiculous idea — Italy has got itself into this mess with its own budget proposals, not because it is in a financial crisis — such support brings with it yet more rules that Italy would have to abide by in order to receive the help.
  • LBBW has hired an origination and syndication banker for its SSA team in Stuttgart, which now comprises five people.
  • The Republic of Indonesia managed to raise $3bn across three tranches of notes in its annual dollar funding exercise, but paid a double-digit premium to attract investors cautious about the sovereign credit.
  • The UK Debt Management Office has chosen the tenor for the final syndication of its 2018-2019 financial year.